Have a general question about employment law? Want to share a story? I welcome all comments and questions. I can't give legal advice here about specific situations but will be glad to discuss general issues and try to point you in the right direction. If you need legal advice, contact an employment lawyer in your state. Remember, anything you post here will be seen publicly, and I will comment publicly on it. It will not be confidential. Govern yourself accordingly. If you want to communicate with me confidentially as Donna Ballman, Florida lawyer rather than as Donna Ballman, blogger, my firm's website is here.

Friday, September 28, 2012

Employment Lawyers Want to Know: Debate Questions for the Candidates

I've shared my questions for the Presidential and Vice Presidential candidates this week. Four of my fellow employment lawyers did the same thing, and I thought I'd give you some of the highlights.

Questions for President Obama

Eric Meyer asked:

Protection of women's rights in the workplace seems to have been a priority for you since taking office. In 2009, you signed the Lily Ledbetter Fair Pay Act, which effects the statute of limitations for filing an equal-pay lawsuit, into law. The Patient Protection and Affordable Care Act, signed into law in 2010, includes workplace breastfeeding protections.

Should you win reelection, what further changes would you make to workplace laws?

Jon Hyman wanted to know:

Four years ago, you campaigned on a promise to help working families. You promised to expand the FMLA to cover smaller employers, and promised that employers would be required to provide paid sick days to all employees. Yet, four years later, your track record on these issues is spotty at best. The only accomplishment to which you can point in the Lilly Ledbetter Fair Pay Act. What can you say to working families to earn their trust that the next four years will be different?

Robin Shea
We already have Title VII and the Equal Pay Act, both of which give remedies to women if they're discriminated against with respect to compensation, as well as your own Lilly Ledbetter Fair Pay Act. (Title VII and the Ledbetter Act apply to pay discrimination based on race, national origin, etc., as well.) An expansion of the existing law is likely to make employers more vulnerable to lawsuits and class action settlement demands in an already bad economy. Given that, what evidence do you have that any significant part of the current sex-based disparity in pay is caused by discrimination against women, as opposed to voluntary work-life choices made by women and men? In light of studies showing that the so-called "gender pay gap" almost disappears when one controls for voluntary choices, why is this legislation necessary and couldn't it actually have the perverse effect of limiting opportunities for women?

Daniel Schwartz asked several questions, including:

As President, you have barred discrimination in your administration on the basis of sexual orientation and gender identity. Given your actions in your administration, why has there been no progress in Congress on passage of the Employment Non-Discrimination Act, a proposed bill that would bar employment discrimination on the basis of sexual orientation? Moreover, do you support that bill anymore? Your campaign website has no reference to that bill.

Questions for Mitt Romney

Daniel Schwartz asked several questions, including:
On your campaign website,you state that the “first step in improving labor policy will be to ensure that our labor laws create a stable and level playing field on which businesses can operate. As they hire, businesses should not have to worry that a politicized federal agency will rewrite the rules of the employment game without warning and without regard for the law.” Yet, the NLRB is — by its nature — a political agency that shifts its agenda depending on who the President is. Under George W. Bush, it became more pro-business and under Obama, it became more pro-union. Are you suggesting that you would try to de-politicize the NLRB? If so, how? And if not, aren’t the changes you propose simply adding to the political nature of the NLRB?

Eric Meyer asked:

As you know, the Family Medical and Leave Act provides job-security protections for qualifying employees with serious health conditions, loved ones with serious health conditions, or who need time off to care for a newborn. Presently pending in Congress are bills to expand the scope of the FMLA. For example, the Domestic Violence Leave Act would provide leave for workers to address domestic violence, sexual assault, or stalking and their effects. The Family and Medical Leave Inclusion Act would amend the FMLA to permit leave to care for a same-sex spouse, domestic partner, parent-in-law, adult child, sibling, grandchild, or grandparent who has a serious health condition.

These efforts would broaden the law. But what if you had the power to repeal the FMLA altogether. Would you do it? And why?

Robin Shea asked:

Actually, several related questions: Do you see the proposed Paycheck Fairness Act and the Employment Non-Discrimination Act, both endorsed by President Obama and the Democratic Party, as hindrances to your party's goals of reining in government regulation and restoring predictability to employers? In the same vein, do you support repeal or scaling back of any of the employment legislation enacted during the Obama and George W. Bush administrations, such the Americans with Disabilities Act Amendments Act or the Lilly Ledbetter Fair Pay Act? How, if at all, do you intend to stop the encroachment of the federal government into the non-union employment relationship?

Jon Hyman wanted to know:
You are on record opposing the Employment Non-Discrimination Act, a bill that would make it illegal under federal law for employers to discriminate on the basis of sexual orientation or gender identity. Yet, you have also publicly stated that you support anti-discrimination and equal rights for all.

Which is it? Are you in favor of equal rights for all, or you do believe that it permissible for employers to deny rights to individuals based on their sexual orientation or their gender identity? And, if the Employment Non-Discrimination Act came across your desk in the Oval Office, would you sign it or veto it?

Questions for Vice President Biden

Robin Shea
wanted to know:

Do you see any inherent conflict between the ENDA (assuming it is interpreted this way) and the rights under Title VII of employees to exercise and express their religious beliefs without discrimination, and to religious accommodation? If not, why not? If so, how do you propose to enforce the ENDA while at the same time protecting employees whose religious beliefs may not be completely aligned with the ENDA?

Daniel Schwartz
asked two questions, including:

Why do you support the Paycheck Fairness Act? And why is that bill needed in light of all the other laws already on the books preventing pay discrimination, including the Equal Pay Act?

Eric Meyer asked:
The White House touts the Lilly Ledbetter Fair Pay Restoration Act as the first piece of legislation -- employment-law or otherwise -- signed into law during President Obama's first term. The President touts fair pay and equal rights, but there hasn't been a second significant employment law passed yet.

Jon Hyman wanted to know:

Mr. Vice President, Governor Romney has accused your administration of supporting a partisan, pro union National Labor Relations Board. Historically, you have been outspoken of your support of the Employee Free Choice Act, which would provide employees the right to form a labor union without the benefit of a secret ballot election. At a Labor Day rally in Detroit earlier this month, you publicly stated that organized labor is one of the reasons why American is recovering. The American business community would not-so-respectfully disagree with you, and believe that activist federal agencies and labor unions are dangerously holding us back.

What would you say to business owners of all sizes who believe that your administration’s labor policies have stifled their ability to operate in today’s economic climate?

Why hasn't there been a second?

Questions for Paul Ryan

Jon Hyman wanted to know this:

You cite Ayn Rand as your inspiration for getting involved in politics. You even gave copies of her novel Atlas Shrugged as Christmas gifts to your staff. Among other philosophies, Atlas Shrugged endorses the belief that a society's best hope rests on adopting a system of pure laissez-faire government. Philosophically, you would seem opposed to government economic intrusions, yet you voted in favor of both the TARP bank bailout and the auto industry bailout. How do you reconcile your claim to be a fiscal conservative with your pro-regulatory Congressional votes on these two key federal bailouts?

Robin Shea asked:

Granted that a right to organize is implicit in right-to-work and secret ballot laws, and granted that the current National Labor Relations Board and public-sector unions have gone overboard during the current administration, do you believe generally in the right of private-sector workers to organize and collectively bargain? If not, do think that any alternatives are needed to ensure that private-sector workers are protected from exploitation and abuse? If so, what would those alternatives be?

Daniel Schwartz had a couple of questions, including:

Your record on the Employment Non-discrimination Act is, to be blunt, muddy at best. You appear to have once voted for passage of the Act, only after trying to prevent it from coming to the floor. Then in 2010, you are quoted as saying you would support the bill, but only if it didn’t include protections for transgendered Americans. Do you support this bill or a similar federal bill banning discrimination against employees based on his or her sexual orientation? If not, why?

Eric Meyer wanted to know:

Your campaign website claims (here) that "unions drive up costs and introduce rigidities that harm competitiveness and frustrate innovation." Both you and Mitt Romney have been critical of the Employee Free Choice Act, a bill that would have made it easier for employees to unionize. Indeed, you once received a 7% approval rating with the AFL-CIO.

Do you feel that unions today provide any benefit in America's workplace?

And, if given the opportunity, would you repeal the National Labor Relations Act altogether?

There you have it: some questions from management and employee-side employment lawyers for the candidates. If you go to the actual blogs, my fellow attorneys have provided some links and/or discussion of their questions. Now, if only we could get the candidates to answer . . .

Thursday, September 27, 2012

Debate Questions for Paul Ryan From an Employment Lawyer

This is part of our series on what questions employment law practitioners would ask of the candidates in the debates. Today, I propose some questions I'd ask Paul Ryan.

During your acceptance speech at the Republican National Convention, you talked about an automobile plant in your district. You said this, " Right there at that plant, candidate Obama said: 'I believe that if our government is there to support you … this plant will be here for another hundred years.' That’s what he said in 2008.Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day. And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight." The truth is that the plant announced it was closing and actually closed while George Bush was still President. Why on Earth would you try to put the blame for that plant's closing on President Obama, and why should we believe anything else you say if you're willing to mislead us on something so easily proven to be incorrect?

OK, maybe that question won't be asked in the debate. But seriously, that was egregious. Lawyers know the jury instruction that says if a witness lies about one thing, you don't have to believe anything they say. I think he should have to answer for such a blatantly misleading statement.

How about asking this one:

You initially voted against extending unemployment benefits in 2010, saying it would add to the deficit. Then you voted for extending unemployment benefits when they were coupled with an extension of the Bush tax cuts. Is it only bad to help the unemployed when you're not simultaneously helping the very rich?

I know. I'll never be asked to moderate one of the debates with an attitude like that.

Your family's company relies a lot on union labor. In 2009, in stump speech in your district, you said, “A lot of conservatives just think unions are nothing but bad. That's just not true.... They're people who are just trying to make their lives better, people trying to collectively negotiate a better standard of living for themselves. What the heck is wrong with that?" You've been a supporter of pro-labor bills like the Davis-Bacon Act, which keeps federally funded construction projects from undercutting prevailing union wages. On the other hand, you supported Governor Scott Walker in his fight against Wisconsin's public sector unions and supported cuts to education funding that caused teacher layoffs. If you are elected Vice President, will you support labor unions or will you work with people like Governor Walker to destroy unions?

 At this point, they're probably escorting me forcibly out the auditorium door. Before I leave, I manage to yell out this one:

You voted for the failed 2007 attempt to pass the Employment Non-Discrimination Act, sometimes called ENDA, to protect employees against discrimination based on sexual orientation. Do you still think it should be illegal to discriminate against gays and lesbians?
It's a question that puts him in a no-win situation. His party opposes any legislation expanding gay rights. His support of ENDA was the right thing to do, but it won't win him friends in his party. If he says he's changed his mind, he loses any goodwill he built up with the gay community with his vote.

Wednesday, September 26, 2012

Debate Questions For Joe Biden From An Employment Attorney

This is part of the continuing series of debate questions being posted by employee- and management-side employment lawyers. These are my questions for Vice President Joe Biden.

Your opponents have supported efforts to roll back union rights and the strength of unions. You said this to the AFL-CIO: "We don't see the value of collective bargaining, we see the absolute positive necessity of collective bargaining. Let's get something straight: The only people who have the capacity -- organizational capacity and muscle -- to keep, as they say, the barbarians from the gate, is organized labor. And make no mistake about it, the guys on the other team get it. They know if they cripple labor, the gate is open, man. The gate is wide open. And we know that too." Why do you think it's important to have strong labor unions in America and what do you think your opponents propose that will harm working Americans?

Then I'd ask:

You said this about your opponents on Labor Day: "Ladies and gentlemen, you, organized labor, are one of the reasons why this country is coming back. Folks, let me make something clear and say it to the press: America is better off today than they left us when they left." How are working Americans better off than they were under George W. Bush?

I might want to know this (from all the candidates, really):

More and more states are passing laws to allow employees to bring their guns to work. They can't be fired for keeping weapons in their vehicles or for telling coworkers they've done so. What kind of legislation, if any, do you think we should have in this country to protect unarmed workers from coworkers who "go postal"?

I'd also want to ask:

President Obama signed the "VOW to Hire Heroes Act" into law on November 21, 2011. The Returning Heroes Tax Credit provides businesses that hire unemployed veterans a maximum credit of $5,600 per veteran, and the Wounded Warriors Tax Credit offers businesses that hire veterans with service-connected disabilities a maximum credit of $9,600 per veteran. This law also fixed a loophole in the law to make sure it is illegal to harass service members at work due to their military service. Why has your administration thought it was important to help veterans and military members get back to work and stay at work?

Tuesday, September 25, 2012

Debate Questions for Mitt Romney on Employment Issues

This will continue the series a group of management-side and employee-side employment attorneys are doing on what questions we would ask the candidates in the debates. Since I handle employee-side issues, I bet you can predict some of what I would ask Mitt Romney, but here goes.

I'd start with this one.

Four years ago, you advocated letting Detroit go bankrupt rather than bailing out our auto industry during the depths of the recession. You addressed some specific solutions, including dumping existing management, saying, "The new management must work with labor leaders to see that the enmity between labor and management comes to an end. . . . Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture. The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat" Do you still believe that management needs to get rid of perks and be more reasonable and fair with labor?
 I'm pretty sure I know the answer, but I'd like to hear him backpedal. I might follow up with this one:

As Massachusetts governor, you worked with Senator Ted Kennedy to develop health care coverage for all employees. Yet you've opposed the strikingly similar provisions of Obamacare. How would you assure that all employees and their dependents get health care coverage?
 That should be fun. Then I'd ask:

During the primary campaign in New Hampshire, you said, “My view has been to allow the minimum wage to rise with the CPI or with another index so that it adjusts automatically over time.” Now you seem to have changed your mind, and say there's no need to raise minimum wage. Which is it? What would you do to bring minimum wage workers over the poverty level, which they are currently about $7000/year under?

I'd probably end with this one:

In 1994, you wrote a letter to the Log Cabin Republicans where you said, "I am more convinced than ever before that as we seek to establish full equality for America's gay and lesbian citizens, I will provide more effective leadership than my opponent. . . . If we are to achieve the goals we share, we must make equality for gays and lesbians a mainstream concern. My opponent cannot do this. I can and will." In 2011, you were asked: "How do you feel about gays serving openly in the military?" and you answered, "That’s already occurred and I’m not planning on reversing that at this stage." As President, are you going to reverse gay rights in the military? Would you support adding sexual orientation to the protected categories in Title VII?

There are lots of other questions I could ask, but I know the answers. The fact is, this election is of huge importance to employees. You can either vote against your own economic interests and can buy into what Fox is telling you, or you can vote with your wallet. For anyone making under a million a year, the choice is pretty clear. I hope the middle class will see it that way.

Monday, September 24, 2012

An Employment Lawyer's Debate Questions for President Obama

This is the first in a series that I am doing along with a group of employment attorneys around the country. Management and employee side attorneys will be providing their own debate questions for the Presidential and Vice Presidential candidates this week. The first candidate is President Barack Obama.

Here are some questions I’d ask the President at the debates if I had a chance:

The very first piece of legislation you signed into law was the Lilly Ledbetter Fair Pay Restoration Act, empowering women to recover wages lost to discrimination by extending the time period in which employees can file claims. You’ve also advocated for passage of the Paycheck Fairness Act, which would have required employers to demonstrate that any salary differences between men and women doing the same work are not gender-related. Plus, you convened a National Equal Pay Task Force to ensure that existing equal pay laws are fully enforced. Why do you feel so strongly about the need for pay equity in America and what do you think about the Republican party’s strong opposition to your efforts toward pay equity?

Then I’d probably ask:

Your opponent wrote an editorial saying we should let the automobile industry go bankrupt rather than bail them out during the worst part of the recession. Do you think the bailout was worth it, and are you glad you saved over a million jobs and supported an industry that has added hundreds of thousands of new jobs when most industries are cutting workers?

I’d follow up with:

You’ve said that you believe people who work full time should not live in poverty. Before the Democrats took back Congress, the minimum wage had not changed in 10 years. Although Congress did raise the minimum wage during your administration, the minimum wage’s real purchasing power is still below what it was in 1968, and full time minimum wage workers are mostly below the poverty line. You’ve said you want to further raise the minimum wage, index it to inflation and increase the Earned Income Tax Credit. Why do you think it’s important to make sure that full-time workers can earn a living wage that allows them to raise their families and pay for basic needs such as food, transportation, and housing?

Then I’d ask:

You repealed Don’t Ask Don’t Tell, which limited gay and lesbian Americans’ right to serve in the military and be honest about their sexual orientation. You’ve also instructed the Justice Department to stop enforcing the Defense of Marriage Act, and you are in favor of the Respect for Marriage Act, which would uphold the principle that the federal government should not deny gay and lesbian couples the same rights and legal protections as other couples. Why do you think it’s important to treat gays and lesbians with respect and to end discrimination against them, and what more will you do to ensure equality for all Americans?

I’d end with:

Most Americans probably think they’re entitled to some sick time off of work, yet three out of four low-wage workers have no paid sick leave. You’ve said you support efforts to guarantee workers seven days of paid sick leave per year. Why do you think it’s unfair that a single mom playing by the rules can get fired or lose wages because her child or she gets sick, and what do you plan to do to ensure paid sick leave for all American workers?

There are, of course, lots more questions I could ask. I think the choice between the candidates as far as workplace issues is crystal clear.

Here's another perspective, from Robin Shea, a management-side employment lawyer.

Friday, September 21, 2012

Ground-Breaking Wage Theft Program Needs Modification

I attended what was supposed to be my first hearing under Miami-Dade County's ground-breaking wage theft ordinance yesterday. I say it was supposed to be my first hearing, because it didn't actually happen for me, nor did it happen for quite a few of the taxpayers who attended seeking justice from the County.

Here's how the County says things are supposed to work:

If a settlement between you and the employer cannot be reached, SBD will attempt to serve the employer notice of the complaint via certified mail. This notice allows the employer to respond to the claim within 21 days of receipt. You also have the option of retaining the services of a court appointed process server to ensure delivery of notice, if certified mail sent by SBD is undeliverable.

In my case, the employer definitely got notice of the claim. So far so good. Here's what's supposed to be next:

Administrative Hearing Process

If the employer does not respond within the 21 days and SBD has confirmation of receipt of the notice, either through U.S. Postal Service or process server, we will schedule the case for the next available hearing date. (Upon request by either party, a one-time continuance of the case may be granted and scheduled for the next calendared administrative hearing.)

We had a hearing set before and the employer got a continuance, thus proving they got notice. More good news, but it caused a month delay.

We finally got the new notice and we double-checked the day before to make sure the hearing was going on as planned. I'm wearing a cast boot due to a rip in a tendon, which we advised them of, and asked if the hearing was canceled or continued that we be notified before I had to hoof it to Dade, park in downtown Miami, and walk the long way through the county building. We got a written confirmation and no cancellation notice. We felt pretty good.

Here's what should have happened:

At the time of the hearing, both the claimant and the employer will have the opportunity to present their cases. If the Hearing Officer determines that a wage violation has occurred, he or she may order the employer to pay liquidated damages to the claimant of up to three times (3x) the amount of wages claimed, as well as payment of administrative costs associated with conducting the hearing to the County payable to the Board of County Commissioners.

Final Orders will be sent to all parties. A prevailing claimant may record a final order or seek post-judgment release through the Miami-Dade civil court system. At this stage, the County’s (SBD) administrative responsibilities at this point have been fulfilled and the file will be closed.

None of the rest happened. Instead, we got to the hearing, waited over an hour, only to find out that the County sent the employer another certified letter, this time with the second hearing notice. The rules say nothing about needing a second certified receipt. Indeed, in the court system regular mail is considered perfectly good service for any notices once the original complaint is served. Better yet, the courts in Florida have gone mostly to email service, which is free.

The result: employers have figured out that the ordinance is really easy to circumvent. All they have to do is refuse to sign the certified mail notice. Their former employee, whose wages they stole, has to take off work, show up, wait hours, pay $12 or more for parking, only to be told they have to start over.


This was incredibly disappointing to me, because I've been such a fan of Miami-Dade's ordinance and have encouraged other counties to adopt similar programs. This is a problem that can be solved easily.

1. Any service after the initial service of the complaint should be by first class mail or email. It's way more cost-effective, so this change alone will save taxpayers thousands of dollars in wasted postage.

2. If, for any reason, the hearing is canceled or continued, participants should be told as soon as possible. If one party didn't get notice (such as the first class letter comes back returned or the email bounces) then let the other party know the day before. If the County doesn't know until the last minute, tell the parties who show up as soon as they arrive. The hard-working staff and hearing officer were clearly frustrated. They had been working from 9 a.m. until past 5 p.m. But at least 1/4 of the time I was there was spent calling people up who had waited over an hour only to be told the hearing wasn't going to happen. The hearings would go much faster (and the taxpayer/voters who show up wouldn't be as upset) if the bad news could be delivered as soon as they get there. The hearing officer wouldn't have to explain and apologize for 5 - 10 minutes for each person. Instead, the staff could tell people when they sign in and not waste valuable hearing time.

3. Use the savings in certified mail to hire more staff. The people working for Miami-Dade County trying to get thieving companies to pay their employees' hard-earned wages are clearly trying, but they were frazzled. They need help. Hire someone to handle sending the notices, confirming with the parties, and notifying parties of any changes or cancellations.

With these minor tweaks, the Miami-Dade County Wage Theft Program should be able to go more smoothly (and alienate fewer voters - is anyone on the Commission listening?)

Friday, September 14, 2012

Why Did The Lawyer Put This In My Employment Contract?: The Termination Clause

In yet another attempt to explain the legalese that lurks in your employment contracts, today I'll talk about some of the language you might see in the contract you sign when you're first hired: the termination clause. It's something you don't really want to think about when you're all excited about a new job offer, but it's almost always in there.

You're most likely to see something like this, if not in a contract or offer letter, then in your handbook:

You agree and understand that your employment is at-will.

Your eyes probably glazed over and you didn't think about this. But the next time you are handed a contract to sign that says this, I suggest you think about it seriously. What this means is that you agree you can be terminated for any reason or no reason at all. If your new boss is in a bad mood three days after you start, even if you gave up a steady job of 5 or 10 years to take this new offer, you're out of there with no severance at all. Especially if you're moving, leaving another job, or are a hot commodity (you have an expertise, a degree, experience or something else that makes you able to pick and choose), I suggest you try to negotiate a better clause than this one.

A slightly more acceptable clause:

You agree that the Company may terminate your employment by giving 90 days' notice. If the termination is for cause, the Company may terminate your employment without notice.
 At least in this one, the company has to give you some notice, or pay out the notice period as severance. The clause might have more or less notice, depending on what you negotiated, but the notice is important. It's also important to define what "cause" for termination will be. If you leave it up to the company to determine whether or not your performance is up to par with no way to measure, then you might as well be at-will.

What's concerning about a clause like this one is sometimes people spend lots of time negotiating the length of the agreement. Say you negotiate a contract with a one year term, with automatic renewals at the end. You think you've assured you have something steady for at least a year. But this clause completely negates that one year. Whatever notice the company puts in here that they have to give, that's likely how much they'll have to pay out.

Even better would be:

This agreement may only be terminated for cause. In the event of termination for cause, the company shall give notice of the alleged cause and give you 30 days to cure the problem before termination.

You still need to worry about defining what constitutes cause, but with this clause you have a chance to fix things if the company thinks you're messing up. If they fire you for no cause, they have to pay out the rest of the contract. That's great if you have lots of time left on it, but if you don't, you might have been better off with the provision above. Still, if I have my druthers, I'll pick this one over that. At least you'll have time to prove yourself, so your move won't be a complete hardship.

If you have lots of leverage, or if the employer wants you bad enough, you might get lucky and get a clause like this:

In the event of termination, the company will pay you 6 months of severance.

Notice it says nothing about cause or no cause. With this one, it doesn't matter how much you mess up. As long as you haven't breached the contract in some way, the employer has to pay out your severance no matter the reason for termination. This kind of clause is especially good if you have a noncompete. If you have to stay out of the industry 6 months, they should pay you 6 months so you can survive. If they want you to stay out longer, you should try to negotiate a longer payout.

Even though you don't want to think about getting fired or laid off, you have to if you want to survive in this economy. If you have any leverage at all to negotiate a better contract, the termination clause is one of the most important clauses to get right.

Friday, September 7, 2012

Why Did The Lawyer Put This In My Contract?: Confidentiality

This will continue my attempt to explain some of the legal mumbo jumbo in your employment contract, and why the lawyers put it there. Today, I'll talk about confidentiality. You may see a sentence or two in your agreement that look something like this:

I promise that I will keep all matters relating to this Agreement confidential and that I will not discuss, disclose or provide information concerning any term of this Agreement to any person or entity, except to my spouse, my attorney, my accountant or tax advisor, the Internal Revenue Service, or pursuant to a subpoena.
This is fairly typical one-sided confidentiality language that your employer's attorneys like to stick into most agreements.

Here's why your employer's lawyer put the confidentiality clause in the agreement: 

It's very simple. They don't want you to tell coworkers about the money you got, or your terms of employment. If they put it in your offer letter or employment agreement, they are trying to keep you from telling colleagues what you make, what benefits you are getting, and whether you have anything cool in the agreement like severance, termination for cause only, or bonuses.

If they put it in your severance agreement, it's because they don't want you to tell your former coworkers that you got severance, how much, if you got any extras like health insurance, and if the company waived your noncompete.

If they put it in your noncompete agreement, they're pretty silly. What's the point of having a noncompete you can't show potential employers? Smart management-side lawyers put in language that you must show the noncompete to potential employers. That way, if you violate it, they can come after the competitor and you. How can they come after a company who can prove you weren't allowed to show it to them and therefore they couldn't have been on notice of it?

Here's what you should ask for:

If your employer wants you to keep the agreement confidential, they should too. Most employers (I'm talking about you, HR departments) leak like sieves. There are no secrets. You'll get blamed for blabbing even if your supervisor or HR is a gossip and can't keep a secret. If the confidentiality provision is mutual, then the company will usually read the Riot Act to anyone who knows about the agreement and threaten them within an inch of their employment if they gossip. I've never had one leak that I know of with a mutual confidentiality clause, but I've seen plenty of leaks with one-sided clauses.

Your employer will tell you that it's in their best interest to keep it confidential, and they have no incentive to tell. True for the company, but not true for a person in the company who likes to play I Have A Secret.

If the provision is in your employment agreement and you aren't in management, your employer might have a problem. The NLRB is taking the position that agreements prohibiting employees from discussing working conditions are a no-no. The National Labor Relations Act, which is what NLRB handles, doesn't cover supervisors, so the company can still get away with this language once you are in management.

Watch out for damages

If the provision is in your severance agreement, they'll try to stick in some heinous penalty if you violate, with no similar provision for themselves (because, of course, they'd never violate confidentiality). They'll say if you violate you must return all of your severance, or that you have to pay liquidated damages of something like $5000. Don't agree to that if you can help it. I actually sat through a witness deposition of a person who wasn't testifying the way the employer would like, so they asked her if she'd told anyone about her severance agreement. She admitted she'd told her mom. The lawyers indicated that she'd violated her confidentiality agreement and they would be coming after her. Can you say witness tampering?

Anyhow, it's tempting to tell immediate family members, fiances, domestic partners or someone else who isn't included in the language about who you can tell. If you violate the agreement, let the employer prove they were damaged. I'd like to see them prove they were damaged when you told your dad.

If you really can't get them to budge on the liquidated damages and can't afford to tell them to go pound sand, then think about who you can't resist telling and make sure they're on the list. If you're going to tell your fiance or domestic partner, list them. It's way tempting to hurt someone after a breakup by calling the ex-employer and telling them you know everything, so make sure you zip it if you aren't allowed to tell. If the employer agrees to include them, the employer will want to include language that you'll tell them about the confidentiality and you'll be liable if they breach, so be careful who you tell.

It's tempting to tell people how you got a great deal, how much more you make than that jerk over in the corner, or how much they paid you when you left. That's why the company put a confidentiality provision in your agreement. Don't give into temptation once you agree to confidentiality. Your former employer will very possibly come after you if you blab.