One of the requirements for information to qualify as a trade secret is that the information must be “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Here are ten ways that employers can maintain the secrecy of trade secrets:
- Physical Protections: Keep trade secrets in a locked room, cabinet, or vault. Employers can also use access rights (like key cards) to restrict who has physical access to the trade secret information, or they can maintain a log of individuals who had access to it and when.
- Digital Protections: When trade secret information is stored digitally, user accounts and passwords can be used to control who has access to the information. If the information is transmitted via email or download, consider using encryption to prevent unauthorized disclosures.
- Label Information as “Confidential.” Although not absolutely necessary, including a label on any documents or information to make clear that it is “Confidential” is helpful.
- Destroy Old Documents or Data. Trade secret information should not be placed in publicly accessible dumpsters or recycling bins in readable form. Instead, shred it before disposal. If trade secret information is stored on a computer or hard-drive, the computer or hard-drive should be wipe-cleaned or rendered inaccessible before disposal, too.
- Confidentiality Agreements: Require employees who have access to trade secrets to sign confidentiality agreements. Confidentiality agreements should clearly define what information may not be disclosed and should authorize the employer to seek injunctive relief and damages in the result of a breach.
- Non-Disclosure Agreements: For vendors or other third-parties who may have access to trade secrets, an employer can require the outside party to sign a non-disclosure agreement. Like a confidentiality agreement for employees, a non-disclosure agreement should clearly define what information is protected and authorize injunctive relief and damages in the event of a violation.
- Require Departing Employees To Return Company Property. Employees who terminate their employment with the company should not be permitted to take company data with them. Instead, employment policies or agreements should clearly inform employees that all company data, whether in digital or hard-copy format, must be returned upon termination.
- Monitor Employee Emails or File Transfers. Employees should not be permitted to email trade secret data to third-parties or personal email accounts or to copy trade secrets to external devices without authorization. Periodically monitoring employee emails, either using software to detect key terms or via manual monitoring, is one way to detect unauthorized disclosures. Software is also available that can alert employers when files are copied to external devices.
- Don’t Get a Patent. Getting patent protection for an invention requires publicly disclosing how it works. If the protections of trade secret law are more valuable to a company than the limited monopoly provided by a patent, don’t get a patent.
- Set a Good Example. If employers want employees to protect the confidentiality of trade secrets, then the leaders and supervisors in the company should set a good example for the employees. If the leaders of the company are careless with trade secrets, the employees will likely be careless, too.
Takeaway: For trade secret protection to apply, an employer must use reasonable efforts to maintain the information’s secrecy. What is reasonable for a particular employer will vary depending on the information protected as well as the nature of the business and the workforce.
A jury in Miami recently found that an employer discriminated against a one-armed security guard on the basis of disability when it fired him following a customer complaint.
According to the EEOC’s press release, the security guard lost his arm in a car accident. Subsequently, the president of the community association where the security guard was stationed complained to his employer that “The company is a joke. You sent me a one-armed security guard.” After receiving this complaint, the employer removed the security guard from his post, ending his employment.
The EEOC filed suit on the security guard’s behalf, arguing that his removal and termination violated the Americans with Disabilities Act (ADA). The EEOC’s primary argument was that reliance on discriminatory customer preferences and stereotypes about what individuals with disabilities can and cannot do violates the ADA. The jury agreed with the EEOC and awarded the security guard $35,922 in damages. To reach this result, the jury had to determine that the security guard could perform his essential job functions, with or without accommodation.
Takeaway: Employers cannot rely on customer preferences to justify discriminatory actions. In this case, the employer likely should have engaged in the interactive process to determine whether the employee could perform the essential functions of the job.
There’s an election coming up on Tuesday, November 4, 2014. Here are the two things that employers in Minnesota need to know about the upcoming election:
- Voting Leave: Minnesota law permits employees to take voting leave “for the time necessary to appear at the employee’s polling place, cast a ballot, and return to work on the day of that election.” For more information about voting leave, click here.
- Election Judge Leave: Minnesota law permits certain employees who serve as election judges to be absent from work for the purpose of serving as an election judge without penalty. For more information about election judge leave, click here.
The recent Ebola case at Texas Health Presbyterian Hospital in Dallas, Texas, provides some important lessons for health care employers. As of today, only 3 cases of Ebola have been diagnosed in the United States (which has a population of approximately 319 million), so there is no need for alarm at this time. The experience in Dallas shows that preparation, education, and training can go a long way in helping a health care employer maintain readiness and a positive working relationship with its staff.
Last week, CNN reported that the National Nurses’ Union raised concerns about an alleged lack of safety protocols for the Ebola response at Texas Health Presbyterian Hospital. Specifically, the nurses’ union complained that: (i) the Ebola patient was not immediately isolated; (ii) nurses were not provided with appropriate protective gear; (iii) nurses did not have proper supplies to dispose of hazardous waste; and (iv) nurses were not required to attend training about Ebola.
Regardless of whether these claims are true, they identify a potentially significant problem for health care employers – failure to maintain a good working relationship with the medical and nursing staff on the frontlines of an Ebola response can significantly impair a health care providers’ ability to respond effectively. In a worst case scenario, a walk-off or strike could jeopardize a health care provider’s ability to operate or negatively impact public safety.
So what can a health care employer do now to avoid such a scenario? While the answer to that question will vary depending on the nature of the clinic or hospital and its risk profile, here are some initial thoughts:
- Designate an Ebola Leadership Team: Health care employers can designate a leader or leadership team to develop an emergency response plan, direct any necessary response for Ebola, ensure adequate preparation and supplies, and to answer any questions from employees. The individuals designated should be responsible for staying up-to-date with respect to reported Ebola cases as well as the latest guidance from the Center for Disease Control (CDC) and other health organizations.
- Ensure Adequate Supplies: Health care employers should make sure that they have adequate protective gear on hand in case a patient is diagnosed with Ebola, including personal protective equipment and supplies for disinfecting and disposing of hazardous waste. It is important that employees know how to access these supplies if needed or how to request additional supplies.
- Provide Training and Education: Health care employers should consider providing education and training to employees about how to recognize Ebola symptoms, how to respond to suspected cases (including where and when patients should be isolated), how to properly don and doff any required protective gear, how to interact with patients, or how to dispose of hazardous waste. Because hands-on education is usually most effective, it may be helpful to run simulations so that employees can get first-hand experience and build their confidence.
- Maintain Good Communication With Employees Or Union Representatives: Health care employers should maintain open lines of communications with employees or their union representatives to make sure that employee concerns are addressed. For example, employers could establish a system for employees or union representatives to ask questions, make suggestions, report concerns, or identify additional training or guidance that would be helpful. Alternatively, employers could establish an intranet site or another system to provide employees with up-to-date information about Ebola and the employer’s procedures.
Some resources for health care employers to learn about Ebola and how to respond suspected cases include the following:
- The CDC’s Information for Healthcare Workers and Settings regarding Ebola;
- The World Health Organization’s Infection prevention and control guidance for care of patients in health-care settings, with focus on Ebola;
- The National Institutes of Health’s Ebola Virus Disease: Information for U.S. Healthcare Workers; and
- The Infectious Diseases Society of America’s Guidelines for Evaluation of US Patients Suspected of Having Ebola Virus Disease.
Takeaway: The current Ebola situation in the United States remains limited in scope and should not be a significant concern for the vast majority of employers. For health care employers, however, investing in preparation, education, and training could be useful to help prepare the employer’s workforce to respond to an Ebola patient, if necessary, and to maintain a good working relationship with employees. For more general information about Ebola and its employment implications, click here.
The EEOC filed its lawsuit against CVS last spring. The case was alarming to employers because it challenged a number of provisions that are fairly routine in employee settlement agreements (e.g., confidentiality, non-disparagement, etc…). Many were awaiting a court decision addressing the merits of the EEOC’s arguments to see what implications it might have for employment settlement agreements.
Unfortunately, the court dismissed the case on a technicality, without addressing the merits of the EEOC’s claims. Specifically, the court dismissed the case on the grounds that the EEOC failed to attempt to conciliate the matter with CVS before bringing its lawsuit, as required by 42 U.S.C. § 2000e-5(b). Because it was undisputed that the EEOC did not first attempt to conciliate the matter, the court held that the EEOC was not authorized to bring the lawsuit and dismissed the case.
Takeaway: Because the CVS case was dismissed on a technicality, employers will need to wait longer to find out whether courts will find any merit in the EEOC’s aggressive new approach to settlement agreements.
On October 7, 2014, the United States Department of Labor (DOL) announced that it would delay enforcement of its new rules designed to narrow the companionship exemption for home care workers under the Fair Labor Standards Act (FLSA).
The new rules were published about a year ago, but are not scheduled to take effect until January 1, 2015. In general, the new rules narrow the companionship exemption so that many home care workers – i.e., workers who help individuals with disabilities or the elderly to continue to live independently in their homes and communities – will now be covered by the FLSA’s minimum wage and overtime provisions. The new rules accomplish this by: (i) providing a more narrow definition of the term “companionship services;” (ii) preventing third-party employers from utilizing the exemption; and (iii) establishing more detailed recordkeeping requirements. A fact sheet summarizing the new rules is available here.
On October 7, 2014, the DOL announced that it would delay enforcement of the new rules for the first six months of 2015. In addition, the DOL said it would exercise “discretion” about whether to enforce the new rules during the second half of 2015. According to the New York Times, a number of states without existing minimum wage and overtime protections pushed for this delay, citing potential increased costs for nursing homes and Medicaid.
Takeaway: The DOL will not strictly enforce its new rules regarding home care workers for at least the first half of 2015 and potentially for the second half of 2015.
Recent reports indicate that the Minneapolis City Council may soon consider establishing a higher minimum wage for employees within city limits. This news follows on the heels of the state-wide minimum wage increase recently adopted by the Minnesota Legislature.
The City of Seattle, Washington made news earlier this summer when it passed an ordinance that will raise the city’s minimum wage to $15.00 per hour over a number of years. Now, the City Pages and Minnpost report that Minneapolis Council Members Alondra Cano and Jacob Frey are currently looking into whether it would be feasible for Minneapolis to raise the minimum wage in a similar fashion. One potential concern that Cano noted is that any such increase might encourage businesses to move operations to neighboring cities, such as St. Louis Park, Bloomington, or St. Paul. Another concern is how a minimum wage increase might impact small businesses or immigrant-owned business.
Currently, the Minneapolis City Council is working on strengthening the city’s living wage ordinance, which requires contractors performing work on covered contracts with the city to pay wages calculated in proportion to federal poverty guidelines. It is estimated that the Minneapolis City Council will focus on the living wage ordinance for about six months. After that, the Council will be able to turn its attention to a potential municipal minimum wage increase.
Takeaway: In addition to the recent state-wide minimum wage increase, employers in Minneapolis should stay alert for a potential municipal minimum wage increase in Minneapolis sometime in 2015.
The first known case of Ebola was diagnosed in the United States last week. Although officials estimate that the chances of an outbreak are very low, here’s some information for employers about the disease and its potential legal implications:
What is Ebola? According to the World Health Organization, Ebola is a virus characterized as a hemorrhagic fever, and it is frequently fatal. In previous outbreaks, the fatality rate has ranged from 25% to 90%, but the average fatality rate is approximately 50%.
Where Is the Ebola Outbreak? The current outbreak of Ebola is primarily affecting the Western African countries of Liberia, Guinea, Sierra Leone, and Nigeria. Liberia has the largest outbreak. Senegal and the United States have each reported one case.
How Is Ebola Transmitted? Ebola is typically not transmitted through casual contact or through the air. Rather, human-to-human transmission of Ebola generally occurs via direct contact with an infected person’s blood (e.g., through broken skin or mucous membranes), secretions, organs, or other bodily fluids. It can also be transmitted through surfaces and materials contaminated with these fluids. People with Ebola are generally not contagious until they begin showing symptoms. Overall, Ebola is less contagious than many other diseases.
What Are the Symptoms of Ebola? The initial symptoms of Ebola are fever, fatigue, muscle pain, headache, and sore throat. As the disease progresses, additional symptoms include vomiting, diarrhea, rashes, impaired kidney and liver function, and in some cases, internal and external bleeding.
What Are the FMLA Implications of Ebola? Ebola likely qualifies as a serious health condition for purposes of the Family and Medical Leave Act. Employees who are diagnosed with Ebola or who have covered family members diagnosed with Ebola may be eligible for FMLA leave.
What Are the ADA Implications of Ebola? Given its severity, Ebola likely qualifies as a disability under the Americans with Disabilities Act. The most likely accommodation that the ADA might require for Ebola is a leave of absence because an employee diagnosed with Ebola will likely be too impaired to perform his or her job functions without posing a direct threat to the safety of his or her self or others.
Can Employers Ask Employees About For Medical Information Relating to Ebola? The same rules that relate to other illnesses or injuries under the ADA and FMLA will also apply to Ebola. In general, this means that any medical inquiries must be job-related and consistent with business necessity, and that any medical information that is provided by an employee must be maintained as confidential. See 42 U.S.C. § 12112(d)(4).
Do Employers Have a Duty To Protect Employees From Ebola? Employers have a general duty to protect employees from recognized hazards in the workplace. The Occupational Health and Safety Act require employers to provide a place of employment which is “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” 29 U.S.C. § 654. For the vast majority of U.S. employers, protecting employees from Ebola in the workplace will likely not be a concern, but it’s possible that it could affect certain types of employers.
What Steps Can An Employer Take to Help Protect Its Staff: Right now, most employers likely do not need to take any precautions. If the number of reported cases grows and an employer deems that its workforce is at risk, however, those employers may want to consider taking some or all of the following steps, depending on their risk profile:
- Educate employees about how Ebola is spread and best practices to avoid transmission;
- Encourage employees to self-report any potential symptoms and to request PTO or a leave of absence if symptoms develop;
- Establish an emergency preparedness plan or emergency response team;
- Establish a plan for notifying employees and continuing work functions if an outbreak occurs;
- Establish a plan for transporting sick employees to the hospital and disposing or cleaning infected materials;
- Establish an isolation room; or
- If an infected individual is in the workplace, establish a plan for identifying those employees with whom the individual came into contact so that they can be monitored for symptoms.
What precautions are necessary, if any, will vary significantly depending on factors including the nature of the employer’s business, its workforce, and its geographic location.
Takeaway: At this time, Ebola should not be a major concern for most employers in the U.S. Employers with the greatest risk likely include health care employers and employers with employees who travel frequently in Western Africa.
In 2014, the Minnesota Parenting Leave Act (MPLA) was amended by the Women’s Economic Security Act. Here’s what employers need to know about the MPLA:
The MPLA May Apply When the FMLA Does Not: Even if an employee is not eligible for leave under the Family and Medical Leave Act (FMLA), the employee may still be eligible for a leave of absence for the birth or adoption of a child under the MPLA.
What Employers Are Subject to the MPLA? The MPLA applies to any employer that employs 21 or more employees at at least one site. Minn. Stat. § 181.940, subd. 3.
What Employees Are Eligible For Parenting Leave Under the MPLA? To be eligible for leave under the MPLA, the employee must: (1) be employed for at least 12 months preceding the request; and (2) during the 12 month period immediately preceding the leave, the employee must have worked an average number of hours per week equal to one-half the full-time equivalent position in the employee’s job classification, as defined by the employer’s policies, practices, or any applicable collective bargaining agreement. Minn. Stat. § 181.940, subd. 2.
What Leave Is Required By the MPLA? Under the MPLA, an employer must provide up to 12 weeks of unpaid leave to an eligible employee who is: (1) a biological or adoptive parent in conjunction with the birth or adoption of a child; or (2) a female employee for prenatal care, or incapacity due to pregnancy, childbirth, or related health conditions. The leave of absence must begin within 12 months after the birth or adoption of the child; however, if the child must remain in the hospital longer than the mother, the leave may begin within 12 months after the child leaves the hospital. Minn. Stat. § 181.941, subd. 1.
How Much Notice Is Required? An employer may adopt reasonable policies governing the timing of requests for unpaid leave and may require an employee who plans to take a leave under the MPLA to give the employer reasonable notice of the date the leave shall commence and the estimated duration of the leave. Minn. Stat. § 181.941, subd. 2.
Continued Insurance Coverage During Parenting Leave: While an employee is on parenting leave, the employer must continue to make available any insurance or health care coverage offered by the employer to the employee and his or her dependants during the leave of absence, but the employer is not required to pay the costs of the insurance or health care coverage during the leave of absence. Minn. Stat. § 181.941, subd. 4.
No Retribution: An employer may not retaliate against an employee for requesting or obtaining a leave of absence under the MPLA. Minn. Stat. § 181.941, subd. 3.
The recent decision in Mathis et al. v. Darden Restaurants et al. provides a good illustration of how to decertify a collective action under the Fair Labor Standards Act (FLSA). 2014 WL 4428171 (S.D.N.Y. Sep. 1, 2014).
In Mathis, servers and bartenders at various restaurants operated by Darden (including Olive Garden, Red Lobster, Bahama Breeze, Longhorn Steakhouse, and Seasons 52) alleged that: (i) they were required to perform off-the-clock work without pay; and (ii) that the Defendants impermissibly imposed a “tip credit” for certain work hours. In July of 2013, the court conditionally certified the collective action. Out of a potential 218,000 class members, more than 20,000 plaintiffs opted-in to the litigation.
On September 1, 2014, the court granted the Defendants’ motion to decertify the collective action on the grounds that the 20,000+ plaintiffs were not similarly situated. In analyzing the motion, the court focused on the following three factors: (1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendants that appear to be individual to each plaintiff; and (3) fairness and procedural considerations. Here’s what the court had to say about the three factors:
Disparate Factual and Employment Settings of Individual Plaintiffs: The court held that the plaintiffs’ disparate factual and employment settings supported decertification. The putative class consisted of both servers and bartenders who worked at 1,995 restaurants across 50 states. The court found that “[t]he relevant policies and practices as to off-the-clock work and wages differ by job title, state, [restaurant brand], specific restaurant, and manager.”
Defenses Available That Are Individual To Each Plaintiff: The court held that individualized defenses supported decertification. The court explained that the Defendants had defenses including that specific class members: (i) did not work off-the-clock; (ii) received managerial instructions that were outside the scope of authority and directly contrary to well-established policy and practice; (iii) voluntarily engaged in off-the-clock work in defiance of Defendants’ official policies; and/or (iv) unreasonably failed to avail themselves of curative steps provided by the employer to recover unpaid compensation. Each of these defenses required individualized consideration with respect to the plaintiff class members.
Fairness and Procedural Considerations: The court held that fairness and procedural considerations also supported decertification, concluding that “collective adjudication would not be fair or manageable.” The court explained that “[t]he circumstances at the thousands of different restaurants and the experiences of the tens of thousands of Opt–In Plaintiffs are too dissimilar to justify a collective action” and presented substantial manageability concerns.
Because all three factors supported decertification, the Mathis court granted the defendants’ motion and decertified the collective action. As a result, the 20,000+ opt-in plaintiffs cannot proceed as a collective action under the FLSA.
Takeaway: When an FLSA collective action gets too big or tries to focus on too many different circumstances, an employer may have a strong argument that decertification is appropriate.
Non-compete agreements are enforceable in Minnesota when the restrictions are reasonably necessary to protect the employer’s legitimate interests, such as the company’s goodwill, trade secrets, or confidential information.
Whether the restrictions in a non-compete agreement are reasonable depends on the nature and extent of the business, the nature and extent of the service of the employee, and other pertinent conditions. Two factors that courts often focus on when determining reasonableness are: (1) geographic scope; and (2) duration.
Geographic Scope: Whether the geographic scope of a non-compete is reasonable depends on what is necessary to protect the employer from unfair competition. For example, if an employee makes sales statewide, a statewide non-compete may be reasonable. Alternatively, a worldwide non-compete may be reasonable if the employer operates globally and the employee has access to confidential information that could be used to compete anywhere. See, e.g., Medtronic, Inc. v. Hughes, 2011 WL 134973 (Minn. Ct. App. 2011) (enforcing worldwide, product-specific non-compete).
Duration: Whether the duration of a non-compete is reasonable also depends on what is necessary to protect the employer from unfair competition. Factors that courts may consider in making this determination include: (1) the length of time necessary to obliterate the identification between the employer and employee in the minds of the employer’s customers; or (2) the length of time necessary for an employee’s replacement to obtain licenses and learn the fundamentals of the business. For employees, one-year non-competes are often enforced, but two-year non-competes may also be reasonable, depending on the circumstances. See, e.g., Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 438 (Minn. Ct. App. 2001) (upholding enforcement of two-year non-compete). Longer non-competes may be enforceable in the context of the sale of a business.
Takeaway: Non-competes will generally be easier to enforce when tailored to protect the employer’s legitimate interests with respect to both geography and duration.
Not unless it’s based on gender – a court recently rejected a plaintiff’s sexual harassment claim because there was no evidence that the alleged harasser’s fat jokes and other inappropriate behaviors were based on gender.
In Carboni v. Fort Wayne Community School Corp., the plaintiff was a teacher who alleged that her mentor, a middle school principal, subjected her to unlawful sexual harassment under Title VII of the Civil Rights Act by acting like a middle school student, not a principal. Civ. No. 1:12-CV-167 (N.D. Ind., Sep. 15, 2014). The plaintiff alleged that the principal made jokes about people, particularly women, being fat. She alleged that he would “would approach a coworker, yell ‘spider,’ raise his leg, and pass gas directly at the coworker.” She also alleged that he frequently used the F-word in the presence of co-workers. Despite this objectionable behavior, the principal gave the plaintiff a positive review.
In rejecting the plaintiff’s claim, the court explained that “many of the complaints about [the principal’s] behavior lack any sexual or gender component, character, or overtones, and the Plaintiff makes no attempt to explain how these actions were directed at her because of her gender.” Much of the conduct was directed at both male and female employees, and frequently was not directed at the plaintiff at all.
The only potential gender component of the plaintiff’s claim was the principle’s telling of fat jokes, which the plaintiff characterized as “fat woman jokes.” But the court found that “[i]f anything, his misconduct was focused on weight, not gender.” Because the plaintiff did not produce sufficient evidence that the principal’s misconduct was based on gender, the court granted the employer’s motion for summary judgment and dismissed the plaintiff’s sexual harassment claim.
Takeaway: Anti-discrimination laws do not totally prohibit people from acting in an immature or crass manner. It is generally lawful for co-workers and supervisors to act like jerks – or middle school students, for that matter – provided that the conduct is not based on a protected category, like gender, race, or religion. Even then, the conduct must be sufficiently severe so that “that discriminatory intimidation, ridicule, and insult permeated the workplace” in order to be actionable.