On April 27, 2020, Governor Greg Abbott issued additional Orders regarding the re-opening of the Texas economy. Among other things, Governor Abbott has issued a Checklist applicable to All Employers in the State of Texas. Any employers with questions about the Texas Employer’s Checklist 4.27.20 or about re-opening their businesses, generally, should feel free to contact us at 214-919-3555.

 

DEALING WITH DEPARTING EMPLOYEES 

3 Steps to Minimize The Risk of Your Secrets Walking Out the Door When a Key Employee Leaves

It happens often and in every type of business: a key employee notifies her supervisor that she has accepted a job with a competitor and will be leaving the company. The initial reaction is panic— “she can’t leave, she knows everything about our business, she knows all of our trade secrets, and she knows our confidential business strategies.” A call is made to outside counsel and everyone gears up for litigation against the former employee and her new employer. But, is that the only course of action?  You may end up at the courthouse but there are steps you can take before filing suit to mitigate the risk that your trade secrets and confidential information will be at risk when the employee walks out the door–you just might be able to avoid the courthouse altogether.

1. Make every reasonable effort to retain the employee.  

If you are dealing with a key employee whose departure will be costly to the organization, you should assess whether it is possible and desirable to retain the employee.  Do not automatically assume the employee is out the door and cannot be convinced or enticed to stay.  Whether it is an issue of compensation, additional vacation time, freedom to work on projects of her choosing, or some other non-monetary perk or benefit, employers should fully explore all available options at their disposal to retain the employee.

2. Negotiate assurances with the departing employee.

If retaining the key employee is not an option, meet with the person, ideally prior to the exit interview, to address the departing employee’s post-employment obligations with respect to the employer’s trade secrets and confidential information:

• • • Explain the importance of preserving the secrecy of the trade secrets and confidential information they had access to or developed during their employment.
    • Discuss all confidentiality, nondisclosure and covenants not to compete that the person may have executed.
    • Ask them if they have any questions or concerns about any areas of their work and any matters which may not be clear to them.
    • Find out where the departing employee is going, what they will be doing, and when they plan to begin work for the new employer.
    • Ask the employee two important questions:  1) are you certain you can perform your new job without using or disclosing our trade secrets and confidential information? 2) will you notify us if you are ever asked to use or disclose any of our trade secrets or confidential information?
    • Have at least two persons present for the meeting and document the meeting with a checklist that the employee initials to indicate you covered the topics in your meeting.

3. Contact the new employer.

Consider contacting the new employer after your meeting and before the employee’s start date.  The purpose of this contact is to inform the new employer that the departing employee executed one or more written agreements in which they agreed not to use or disclose confidential information and trade secrets belonging to the company.  Describe the former employee’s work in general terms but provide enough specificity to place the new employer on notice of the areas you are most concerned about.  Detail the efforts you have undertaken to obtain assurance from the departing employee that she will honor her obligations of confidentiality and that she has provided assurance her new job will not require her to use or disclose your trade secrets.  Request confirmation from the new employer that they will not ask or allow her to use or disclose any of your trade secrets in her work for them.

Taking these steps will not eliminate the need for litigation in every departing employee situation. Sometimes, litigation may prove to be the only means of protecting against imminent use and disclosure of your trade secrets.  But, when followed, these steps may reduce the number of lawsuits filed merely out of an abundance of caution, because an employee “inadvertently” disclosed trade secrets, or because a new employer was not aware of the former employee’s previous work.  And if followed, these steps will strengthen the foundation of any trade secret litigation you may be forced to initiate.

For additional information about our Employment Law Practice or to make arrangements for an initial consultation with a lawyer call our law office directly at (214) 919-3555.

On April 2, 2020 the Families First Coronavirus Response Act (H.R. 6210) takes effect and will remain in place until December 31, 2020.

The two major provisions of the Act are the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.  Both provide paid leave for employees absent from work for reasons related to COVID-19. Benefits will differ for full-time versus part-time employees who are defined as follows: full-time employees are individuals who work for their employer for 40 hours or more per week and part-time employees are individuals who work for their employer for less than 40 hours per week.

Emergency Paid Sick Leave Act

The Emergency Paid Leave Act applies to all “covered employers” which includes private sector employers with fewer than 500 employees, and public sector employers with 1 or more employees. Note, there is a possibility that certain health care providers, emergency responders and small businesses with fewer than 50 employees may be exempt from the bill’s paid leave requirements if they can show that compliance with the requirements of the Act would jeopardize the viability of the business as a going concern.  Guidance on this exclusion process is expected to be issued on March 25, 2020.

This Act states that an employer shall provide to each employee paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:

1. The employee is subject to Federal, State, or local quarantine or isolation order related to COVID-19;
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2);
5. The employee is caring for a son or daughter of such employee, if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions; or
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Full-time employees are entitled to 80 hours of paid sick time and part-time employees are entitled to paid sick time for the number of hours equal to the number of hours the employee works, on average, over a 2-week period.

If the employee is entitled to paid sick leave for a reason described in 1, 2, or 3 (listed above), the employee’s required compensation shall not be less than the greater of the employee’s regular rate of pay, or the minimum wage rate in effect for such employee in the applicable State or locality, whichever is greater. However, the employee’s required compensation may not exceed $511 per day and $5,110 in the aggregate over the two-week period.

If the employee is entitled to paid sick leave for a reason described in 4, 5, or 6 (listed above), the employee’s required compensation is two-thirds of the employee’s regular rate of pay and may not exceed $200 per day and $2,000 in the aggregate over the two-week period.

Paid sick time does not carry over from one year to the next, and the employee is entitled to paid sick leave regardless of the duration of their employment. Additionally, the employee may use paid sick time before using other paid leave, but the employer cannot require the employee to use paid leave before using paid sick time.

After the first workday (or portion thereof) that an employee receives paid sick time under this Act, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time. Employers are required to post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the requirements described in this Act.

Emergency Family and Medical Leave Expansion Act

The Emergency Family and Medical Leave Act amends the Family and Medical Leave Act of 1993 (FMLA) and applies to all employers with fewer than 500 employees (subject to the same possible exemptions for health care providers, emergency responders and small businesses with fewer than 50 employees).

To be an “eligible employee” under this Act, the employee requesting leave from work must have worked for the employer for at least 30 days prior to requesting the leave, and the leave must be requested because the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee, if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency related to COVID-19 declared by a Federal, State or local authority.

This act allows for an employee to take up to 12 weeks of job-protected leave, of which the first 10 days are unpaid – however, the employee may use paid time off (PTO) that he or she has accrued to cover these 10 unpaid days.

After these initial 10 days of unpaid leave, the employee’s paid leave is calculated based on an amount that is not less than two-thirds of an employee’s regular rate of pay subject to a maximum cap of $200 per day and $10,000 in the aggregate over the 12 week period.

Note: employers with fewer than 25 employees do not have to restore the position of employees who take paid leave if the employee’s position no longer exists due to economic conditions or other changes in operating conditions of the employer caused by a public health emergency.

For additional information about our Employment Law Practice or to make arrangements for an initial consultation with a lawyer call our law office directly at (214) 919-3555.