Employment Law Blog Archives - Page 2 of 6

New York Non-Compete: The Legitimate Interests Test

Apr 1, 2020 | By Ottinger Employment Lawyers | Read Time: 6 minutes

Decided almost a half century ago, Reed, Roberts Assoc. v Strauman, 40 N.Y.2d 303 (N.Y. 1976), remains a pillar of New York case law when determining if a non-compete is enforceable. With this decision, New York State’s highest court established a framework for determining whether a non-compete (or any other restrictive covenant) is “reasonable” and, therefore, enforceable. Background In this case, the employer, Reed, Roberts Associates, Inc. (“Reed Roberts” and, sometimes, “the company”), provided advice and guidance to employers with respect to their obligations under New York State unemployment laws. The company’s expertise also extended to advising their clients in the areas of worker’s compensation, disability benefits, and pension plans. By 1976, Reed Roberts boasted over 6,000 customers, 21 offices nationwide, and gross sales of almost $4 million. In 1962, Reed Roberts hired John Strauman. As part of his employment contract, Mr. Strauman agreed to two restrictive covenants: a non-solicitation covenant and a non-compete covenant. The non-solicitation covenant provided that Mr. Strauman would never solicit any of Reed Roberts’ clients. The non-compete provided that Mr. Strauman would not, for a period of three years from the date of his termination of employment, engage in or have an interest in any business of the same type as Reed Roberts, provided such business was located within the City of New York or the counties of Nassau, Suffolk and Westchester. During his 11-year tenure with Reed Roberts, Mr. Strauman became a valuable employee and received three promotions, eventually rising to the position of senior vice-president in charge of operations. A key employee, Mr. Strauman was both responsible for formulating company policy and instrumental in devising most of the forms utilized by the company in rendering its services and in setting up its computer system. “Importantly, however, he was not responsible for sales or obtaining new customers.” Reed, Roberts Assoc. v Strauman, 40 N.Y.2d 303 (N.Y. 1976) p. 306. In 1973, Mr. Strauman left Reed Roberts and started his own company, Curator Associates, in direct competition with his former employer. Curator Associates was located in the same municipality as Reed Roberts, a geographical area specifically covered by the non-compete covenant that Mr. Strauman had signed in 1962. Reed Roberts brought a lawsuit against John Strauman and Curator Associates alleging that Strauman had been soliciting their customers and requesting that the court enforce the non-compete and non-solicitation covenants. Specifically, Reed Roberts requested relief via a court-issued injunction prohibiting Mr. Strauman and Curator Associates from (a) engaging in the business of unemployment tax control within the New York City metropolitan area for a period of three years, and (b) soliciting any of Reed Roberts’ customers permanently. Rules for Evaluating Restrictive Covenants Under New York State law, generally, restrictive covenants such as non-compete and non-solicitation provisions are enforceable only to the extent that they are reasonable. Whether or not a provision is determined to be “reasonable” differs based on context. In Reed, Roberts Assoc. v Strauman, the New York Court of Appeals outlined a framework for determining whether a restrictive covenant is “reasonable” (and therefore enforceable) under New York law. Reasonableness Framework for Restrictive Covenants In the employment context, restrictive covenants (such as non-competes) will only be considered reasonable and therefore enforceable to the extent that such provisions are: reasonable in time and geographic area; necessary to protect the employer’s legitimate interests; not harmful to the general public; and not unreasonably burdensome to the employee. In addition to considering the above framework for determining reasonableness, New York courts are more inclined to find that a restrictive covenant is reasonable if the facts show that there has been a conspiracy or breach of trust by the employee that results in commercial piracy. When is a Non-Compete Necessary to Protect an Employer’s “Legitimate Interests”? Focusing on the second prong of the reasonableness framework described above, the New York Court of Appeals set forth the following two-part test for determining whether a restrictive covenant (such as a non-compete) is necessary to protect an employer’s legitimate interest. A restrictive covenant is necessary to protect an employer’s legitimate interests and enforceable on such grounds only: to the extent necessary to prevent the disclosure or use of an employer’s trade secrets or confidential customer information; or where an employee’s services are unique or extraordinary. When is a Non-Compete Not “Unreasonably Burdensome” to the Employee? Focusing on the fourth prong of the reasonableness framework, the New York Court of Appeals shed some light on when a non-compete might be considered unreasonably burdensome to the employee. According to the court, a restrictive covenant is unreasonably burdensome to an employee when it restrains the employee’s right to apply, to their best advantage, the skills and knowledge (including those techniques which are skillful variations of general processes known to the particular trade) acquired by the overall experience of any previous employment.Id.at p. 307. The Reed court also noted an exception for members of “the learned professions.” The Court explained that a restrictive covenant might not be unreasonably burdensome to such an employee, provided that the restrictive covenant is reasonable and such employee’s services are unique or extraordinary. Procedural History On the first issue, the trial court ruled against Reed Roberts, refusing to grant an injunction that would enforce the non-compete and prohibit Mr. Strauman and Curator Associates from engaging in its business. The trial court explained that an injunction was not appropriate because (a) there were no trade secrets involved and (b) Mr. Strauman’s services were not so unique or extraordinary (even though he was considered a “key employee”), and therefore the non-compete agreement was not reasonable and was therefore not enforceable. On the second issue, the trial court ruled in favor of Reed Roberts, granting an injunction to permanently prohibit Mr. Strauman and Curator Associates from soliciting Reed Roberts’ clients. The trial court reasoned that it would be unjust and unfair for Mr. Strauman to utilize his knowledge of Reed Roberts’ internal operations to solicit its clients. Upon appeal, the New York State Appellate Division affirmed the trial court’s decision on both issues. The decision was […]

Employment Law Blog

Trade Secrets: What Companies Must do to Protect them

Apr 1, 2020 | By Ottinger Employment Lawyers | Read Time: 3 minutes

A trade secret is, essentially, information of commercial value that is kept secret by those who have an interest in protecting and benefitting from its value. The attribute of secrecy is fundamental to whether certain information qualifies as a trade secret. Unless the entity possessing the information makes a reasonable effort to maintain the secrecy of the information, the information will not be deemed a trade secret and will not receive legal protection as such. The decision in the case of Abrasic 90 illustrates just how vital protecting secrecy is. Abrasic 90 v. Weldcote Metals, No. 18-C-5376 (N.D.Ill. Mar. 4, 2019). In that case, the court held that plaintiff Abrasic 90 could not show an adequate likelihood of success on the merits of its claims to warrant enjoining defendants, including plaintiff’s former CEO and his subsequent employer, Weldcote Metals, from operating in the abrasives industry and using Abrasic 90’s purported trade secrets to do so. Central to the court’s holding was its finding that, although some of the information taken by the defendants was of such a nature that its compilation might be protectable as a trade secret, Abrasic 90 “did virtually nothing to protect that information to preserve its status as a trade secret.” The company’s “data security was so lacking” the court had difficulty identifying “the most significant shortcoming.” The court nevertheless lists those shortcomings, which included: Failure to enter into any nondisclosure or confidentiality agreements with employees, distributors, or suppliers. The nonexistence of any policy around the confidentiality of its business information. Failure to train employees or otherwise instruct them regarding their obligations to keep certain categories of information confidential. Allowing the defendant CEO’s employment agreement, with its nondisclosure and noncompete provisions, to expire five years prior to his departure. Failure to ensure any confidential information was returned when employment relationships ended. Failure to ask former employees to delete secret business information from personal devices. Use of a shared network drive, accessible via a shared password, with no encryption and no restrictions on anyone’s ability to access, save, copy, print or email anything kept on the shared drive. Rejection by the company of its IT manager’s recommendation that the company segregate certain documents, allow access only on a need-to-know basis and adopt an “Acceptable Device Use Policy.” Generally, doing nothing to protect trade secrets that was, in any way, different than steps taken to protect information that was “indisputably not a trade secret.” The lessons are clear for any entity that wants to claim trade secret status for certain information. Steps to protect such information must include: Identification, labeling, and segregation of the secret information. When secret business information is unidentified and freely intermingled with non-confidential information, it undermines any otherwise reasonable measures to protect that information. Physically and electronically securing the information. Physical security means that hard copies of secret business information is kept in locked file cabinets, rooms or other areas of restricted access. Access to and use of electronic information must also be controlled. The information must not be made freely available on shared drives. Rather, access must be restricted to those who have a “need-to-know” the information. This may be done through encryption, access permissions systems, password protection, etc. Having clear data security policies to describe what is a trade secret, who is authorized to access, use, copy or disclose such information, and what employees must generally do to protect secret business information. Training employees on these matters. Adequate use of nondisclosure and confidentiality agreements with anyone to whom trade secret information is disclosed – especially employees. This includes keeping all such agreements current. Monitoring and enforcement of data security policies and nondisclosure and confidentiality agreements. Procedures to ensure the return or destruction of trade secret information in possession of others when relationships with employees, suppliers, distributors, and customers reach their end. Designating information as a trade secret can have important implications for executives embroiled in non-compete disputes. This is becasue New York courts generally will not enforce a non-compete agreement unless necessary to protect a companies trade secrets. If a company does not take steps to protect its trade secrets then the information will be not be deemed a trade secret. This will likely prove fatal to the companies attempt to enforce its non-compete agreement.

Employment Law Blog

Pregnancy Discrimination at Work: A New Epidemic

Apr 1, 2020 | By Ottinger Employment Lawyers | Read Time: 2 minutes

My name is Robert Ottinger and I’m an employment lawyer. For 20 years I’ve been helping employees and we have offices in New York and California. Trying to work while pregnant or as a new mother has never been harder. There’s a misconception in America that a woman can’t be both a good mother and an effective worker at the same time. A recent New York Times article said it well, pregnancy discrimination is rampant in America’s largest companies. Pregnant woman today get sidelined and worse, when they complain about it, they often get fired. For example, Otisha Woolbright, she was featured in that article and she asked her boss at Walmart if she could stop lifting heavy objects due to her pregnancy. Her boss though said no, “lift or leave”, and she knew though if she left, it’d be really hard to find a job while she’s pregnant. So she just kept on lifting. But after she had her second near miscarriage, she asked for maternity leave and Walmart fired her three days later. Rachel Mountis, another example, she was also in that article. She had a similar experience in her job at Merck, the big pharmaceutical company. She was rising up the ranks, getting promoted, winning awards all before she got pregnant and hat changed when she asked for maternity leave and she was fired just a few weeks before her due date. There’s a strong network of federal and state laws that protect women from pregnancy discrimination. It is 100% illegal to fire a woman because she’s pregnant. Now if this has happened to you, you are legally protected, but you need to take action against the company. Pregnancy-related firings normally happen in other one of four circumstances: (1) after the company first learns about the pregnancy or (2) after the pregnant employee asks for time off or for an accommodation for her pregnancy, (3) while on maternity leave or (4) within the first year after returning from leave. If you suspect that you were fired because of your pregnancy, fill out the pregnancy discrimination form on our website. This form is on our website or you can also click the card above the video. If you fill out this form, it will help us determine if we can help you. All the information on the form is confidential and it won’t be shared with anyone. Thanks for watching this video and remember, if your rights are violated at work, call The Ottinger Firm.

Employment Law Blog

FMLA Firings: Getting Fired for Taking Family Leave

Apr 1, 2020 | By Ottinger Employment Lawyers | Read Time: 2 minutes

My name is Robert Ottinger and I’m an employment lawyer. My law firm, The Ottinger Firm has been helping employees for over 20 years and we have offices in New York and California. Have you ever had to take time off of work to care for or a sick parent or a child or even yourself if you’re sick? Well, you’re not alone because you know that happens to pretty much everybody at some point. Take Kirsten, for example, she had to take time off to care for her mother. Kirsten was a fifth grade teacher at the time at the St James School in Torrance, California. After her first year of teaching, Kirsten got a great review from the school’s principal, sister Mary Margaret. The evaluation said that Christian was really good at creating a safe and caring environment for her children. Well, sadly, six months later, Kirsten got some really bad news about her mom who was diagnosed with breast cancer. Kirsten told the school she needed to take some time off to care for her mom during the surgery and chemotherapy and the law that she had to use to have the right to take this time off is called the family medical leave act. It’s also called the FMLA. This law gives every one of us, if you qualify, the right to take 12 weeks of unpaid leave to care for a sick family member. Since Kirsten worked for a Catholic school, we would expect it mighty do the right thing for Kirsten at this time, like give her all the time off she needed and throw the full support of the church and the community be behind her. Is that what sister Mary Margaret did though? Sadly, it’s not. Sister Mary Margaret fired Kirsten right after she asked for the time off. So what do you think Kirsten did well? She used that law I just mentioned ,the family medical leave act and she sued the school for firing her. Now under this law, the FMLA, it does give you the legal right to take time off to care for a sick parent, your kids, your spouse, and even you. It also says though, that it’s highly illegal to fire somebody who asked to use the FMLA. Firing someone for trying to use the FMLA is called FMLA retaliation. This is a really strong law. It’s a federal law and it provides for mandatory doubling of damages. If you have been fired over the family medical leave act, you might have a really strong case. If that’s you, please fill out this form on our website. It’s a very detailed form we designed it just for FMLA cases and I guarantee you the information you provide is confidential. We won’t share it with anyone. Thank you for watching and remember, if your rights are violated at work, call The Ottinger Firm.

Non Compete Agreements

Why Not Blue Pencil?

Apr 1, 2020 | By Ottinger Employment Lawyers | Read Time: 3 minutes

“Blue penciling” refers to the convention whereby a court may exercise its discretion to modify parts of a contract that violate public policy, and which are, therefore, void. In the employment context, the questions whether, when and how much blue-penciling is warranted come up most frequently when courts are asked to enforce restrictive covenants such as non-compete and nonsolicitation agreements. A decision last year in the Colorado Court of Appeals, 23 LTD v. Herman, illuminates why some courts have retreated from “blue penciling.” 2019 Colo. App. 113, No. 18CA0950. Ms. Herman Solicits a Customer In the Colorado case, the company, 23 LTD, doing business as Bradsby Group, sued a former employee, Tracy Herman, for breach of non-compete and nonsolicitation sections of her employment agreement. Herman had been hired by Bradsby as a legal recruiter. She had signed an employment agreement stating that she would not become for “twelve (12) months from the date of termination of employment … an owner, partner, investor, or shareholder in any entity that competes with Bradsby” within a restricted area. The restricted area was defined as any place within thirty miles of Bradsby’s principal place of business, which was located in downtown Denver. The agreement also included a nonsolicitation provision restricting Herman from contacting any person or entity who had had any contact with Bradsby during Herman’s last twelve months of employment with them. At the conclusion of her employment with Bradsby, Herman formed her own company, obtaining and designating a mailing address for it at a location outside the restricted area. She later reached out to a former job applicant from her time at Bradsby to inquire whether anyone in the contact’s network might be interested in a position she was recruiting to fill. The contact had been previously offered a position with a law firm client of Bradsby’s but had turned it down. When Herman contacted him later, he asked whether that law firm job might still be open. Herman then communicated with the law firm. The contact was eventually hired by the law firm, and Herman collected a fee from the hiring firm. A One Dollar Verdict At trial, a jury decided that Herman had not violated the non-compete provisions of the agreement but that she had violated the nonsolicitation provision. The jury awarded damages to Bradsby of one dollar. However, the district court set aside that verdict because it found the nonsolicitation provision of the contract to be so broad as to be void and in violation of Colorado law. The district court also declined to “blue pencil” the nonsolicitation provision to make it enforceable. Upon appeal, Bradsby argued that the district court erred and/or abused its discretion in declining to blue-pencil the nonsolicitation provision. Bradsby argued that the severability clause in its agreement obligated the district court to blue-pencil the agreement to conform to Colorado law. Stating that “Colorado law provides little guidance as to when, and to what extent, trial courts may blue pencil unreasonable non-compete provisions,” the court of appeals considered case law from other jurisdictions. In discussing its reasoning, the court of appeals pointed out that even though a contract may grant a court the authority to modify an overly broad non-compete agreement, doing so would essentially require the court to rewrite an unlawful contract. No Blue Penciling The court noted that other states’ courts had rejected the proposition that parties to a contract may delegate the responsibility to the court to draft language for them. “We are firmly convinced that parties are not entitled to make an agreement, as these litigants have tried to do, that they will be bound by whatever contract the courts may make for them at some time in the future.” Quoting Rector-Phillips-Morse, Inc. v. Vroman, 489 S.W.2d 1, 4 (Ark. 1973). The court further explained that it is not itself a party to the contract. The parties “have no power or authority to enlist the court as their agent.” Thus, parties to a contract cannot “contractually obligate a court to blue pencil non-compete provisions that it determines to be unreasonable.” “Fundamentally, it is the obligation of a party who has and wishes to protect, trade secrets to crafting contractual provisions that do so without violating the important public policies of [the] state. That responsibility does not fall on the shoulders of judges.” Citing Rector-Phillips-Morse, Inc. v. Vroman, 489 S.W.2d at 4; Bayly, Martin & Fay, Inc. v. Pickard, 780 P.2d 1168, 1175 (Okla. 1989). Accordingly, the court of appeals held that “it is not the function of a court to write or rewrite contracts for parties to enable enforcement of a contract that, as written, violates the public policy of the state.” While a court may elect to blue pencil “an otherwise offensive restrictive covenant,” the trial court “has broad discretion whether and when to exercise that authority.”

Employment Law Blog

Family and Medical Leave Act (FMLA) & California Family Rights Act (CFRA)

Mar 25, 2020 | By Ottinger Employment Lawyers | Read Time: 4 minutes

When can You Take FMLA? Under the federal Family and Medical Leave Act, or FMLA, you can take up to 12 weeks of leave within a 12–month period when: You are unable to work due to a serious health condition. You are caring for an immediate family member with a serious health condition. You have a newborn child or have a child placed with you for adoption or foster care. There are “qualifying exigencies” arising out of a family member’s active duty or call to active duty status as a member of the National Guard, Reserves or regular armed forces. The California Family Rights Act, or CFRA, also entitles employees in Los Angeles, San Francisco and throughout California to 12 weeks of leave within a 12–month period for bonding with a new child, for the employee’s own serious health condition or to care for a family member with a serious health condition. Leave under the CFRA runs concurrently with the FMLA. Generally, leave may be taken all at once or intermittently. However, under FMLA, intermittent leave for the purpose of bonding with a new child is subject to the employer’s prior approval. Under the CFRA, the employer may require you to take two-week minimum increments for bonding leave. The FMLA and CFRA laws cap out available leave for all qualifying events at 12 weeks total. How do I Know if I am Eligible for FMLA Leave? If your employer has at least 50 employees within a 75–mile radius it must comply with the FMLA and the California Family Rights Act. The CFRA and the FMLA have the same basic eligibility requirements: You must have worked for your employer for at least one year and you must have worked at least 1,250 hours during the 12 months just before the start of your leave. Paid time off, such as vacation or sick leave, cannot be counted toward the 1,250 hours. Who Counts as a Family Member Under the FMLA? Under FMLA, a spouse (including a same-sex spouse), child or parent is considered a family member, but a registered domestic partner is not. Under the California Family Rights Act, a registered domestic partner is treated the same as a spouse. What Counts as a Serious Health Condition? A serious health condition is any illness, injury, impairment, or physical or mental condition that causes or requires: Any period of incapacity or treatment in connection with or after inpatient care such as an overnight stay in a hospital Any period of incapacity of more than three consecutive days requiring absence from work, school or other regular daily activities with ongoing medical treatment Ongoing treatment by a health care provider for a chronic or long–term health condition that is incurable Restorative dental or plastic surgery after an injury A chronic serious health condition is one that requires “periodic visits” (at least twice a year) for treatment to a health care provider, that continues over an extended period, and that may cause episodic rather than continuing periods of incapacity. Voluntary cosmetic treatment is not a “serious health condition” unless it ends up requiring inpatient care due to complications. Routine preventative care is also not considered a serious health condition. Employers may request medical certification that there is a “serious health condition” but privacy laws limit the details they may require. An employer must allow you at least 15 calendar days to obtain the medical certification. Is Pregnancy a Serious Health Condition Under the FMLA? Under the FMLA, pregnancy is considered a serious health condition that would qualify for leave. Pregnancy also qualifies an employee for up to twelve weeks of Pregnancy Disability Leave provided the employer has at least five employees. Pregnancy Disability Leave may be taken in addition to CFRA leave and does not have to run concurrently. What About my Salary and Benefits While I am Taking FMLA or CFRA Leave? Your employer is not required to pay you under the FMLA or CFRA, but they are under the California Paid Family Leave (PFL) law. The PFL provides partial pay to employees need time off to care for a sick family member or to bond with a newborn. Click here for more info on the PDL. Your employer may require you to use accrued vacation time or other accumulated paid leave. Under the CFRA, your employer cannot require you to use sick leave unless the leave is for your own serious health condition. If you get health benefits under a group health plan, you will be entitled to continue your health insurance at the same cost as you would pay while you are working. Can You be Fired for Taking FMLA or CFRA Leave? No. After you take FMLA or CFRA leave, you are entitled to return to the same position unless it is no longer available. If it is not available (due to layoff or closure, for example), then you must be offered an alternative position that is comparable in shift, work schedule, pay, benefits, location, job duties, and promotional opportunities. If you are not given the same or a comparable position upon return from leave, the employer must prove that there was no such comparable position. FMLA Retaliation Companies often do not understand the FMLA and fire employees who inquire about taking leave or who take leave. This is called FMLA retaliation. Because retaliation is so common, the FMLA expressly forbids retaliation and provides an automatic doubling of damages. FMLA retaliation cases can be very strong and easy to resolve quickly. If you have been fired in connection with FMLA leave, contact us for a free consultation.

Employment Law Blog

Employment Discrimination Under California Law

Mar 25, 2020 | By Ottinger Employment Lawyers | Read Time: 2 minutes

Employment discrimination is against the law. Employers are not allowed to treat you differently because of your: Pregnancy Age Race Ethnicity Religion Gender Disability These descriptions, among others, fall into classes that are protected by law. If you have a discrimination case, contact us for a free consultation. We have offices in San Francisco and New York. Laws Enforced by Our Discrimination Lawyers Discrimination lawyers specialize in a number of different laws that protect employees against being treated differently. For example: On the federal level, discrimination is prohibited against all of the classes we named above. The Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, and the Age Discrimination Act (ADEA) prohibits discrimination on the basis of age (over 40). The New York State Human Rights law and the California Fair Employment and Housing Act protect employees against discrimination because of their sexual orientation, status as a victim of domestic violence, or marital status. Specifically for employees in NYC and San Francisco, the New York City Human Rights law and FEHA extends its protection to those people who have been discriminated against because of: Sexual identity (such as transgender orientation) Arrest or conviction record Status as a victim of domestic violence (including stalking and sex offenses) Unemployment status The New York City Human Rights Law and FEHA are some of the most powerful anti-discrimination laws in the country. Discrimination lawyers in New York and San Francisco should be thoroughly familiar with this law. How to Protect Yourself from Discrimination If you are experiencing discrimination at work, you have a few options: Lodge a written complaint with your employer by following the procedure in their employee manual. File a complaint with an external agency, such as the Equal Employment Opportunity Commission (EEOC) or the New York State Division of Human Rights. Consult with discrimination lawyers with experience in the field who can guide you through the process and advocate for you in court. It is important to remember that the law protects you against any retaliation by your employer for filing complaints, either internally with your HR department or externally with a governmental body. The process of pursuing a case of discrimination against an employer can be complex and time-consuming, but our lawyers are here to help. Choose Ottinger Employment Lawyers to Handle Your Discrimination Case Our discrimination lawyers are here to help. If you feel that you have been subject to employment discrimination, it is essential that you find an experienced discrimination lawyer to pursue your case. When selecting a discrimination lawyer, it is important to find a firm with a proven track record of success, both in obtaining settlements and at trial. At the Ottinger Employment Lawyers, our discrimination lawyers have successfully represented hundreds of employees and recovered millions for them. We also have extensive experience litigating such claims through trial. Contact us today to see how we can help you.

Employment Law Blog

Right to Sue Letters from the EEOC

Mar 20, 2020 | By Ottinger Employment Lawyers | Read Time: 5 minutes

The Ultimate Guide to Right to Sue Letters This guide is for anyone who has received a right to sue letter or wants to know more about them. You will learn what you need to do when you get a right to sue letter and you will understand the big picture. This guide will also help you decide what steps to take next and help you find a good employment lawyer if you decide to file a lawsuit. Bottom line: This guide will help anyone who recently received a right to sue letter. CHAPTER 1 What is a Right to Sue Letter? In this chapter, I’ll show you what a right to sue letter is and what to do after to you get one. The key point here is that you only have 90 days to file an employment discrimination case after you get a right to sue letter. The Equal Employment Opportunity Commission (EEOC) issues “right to sue letters” when they are finished working on a case. When the EEOC issues a right to sue letter, they are saying “we have done all we can do, now you can file a lawsuit if you want to.” A right to sue letter gives you permission to file suit in federal court. In fact, you need a right to sue letter in order to file most kinds of employment discrimination cases. A right to sue letter is not needed to file an age discrimination or equal pay act case. Your Right to Sue Letter and Time Limits If you received a right to sue letter, the clock is now ticking. You have 90 days to file your case. If you don’t file it within 90 days, you could be forever barred from filing your employment discrimination case in federal court. Click here for helpful information from the EEOC about right to sue letters and filing discrimination lawsuits. What to Do After You get a Right to Sue Letter After you get a right to sue letter, you must decide if you want to file an employment discrimination lawsuit. Remember, you only have 90 days. That’s not a lot of time to make this decision, find a lawyer and file suit. Note: To summarize, a right to sue letter means that you now have the right to sue your employer in federal court. It also means that the EEOC is no longer working on your case and it’s up to you to pursue your case. To do this, you will probably need a law firm and we get into that in chapter 4 below. CHAPTER 2 What Does the EEOC Do? The EEOC is the federal agency that investigates employment discrimination. Employment discrimination occurs when someone is mistreated at work because of a personal trait. As you might imagine, the EEOC gets a lot of complaints and they often don’t have enough staff to handle it all so things can move slowly. The EEOC The EEOC investigates employment discrimination. Employment discrimination occurs whenever an employee suffers an adverse employment action (such as getting fired or demoted) due to their race, disability, gender, religion, pregnancy, age or other traits. The EEOC also investigates sexual harassment cases. After you file an employment discrimination complaint with the EEOC, the investigation process starts. The first step is the appointment of an EEOC investigator. The investigator may interview witnesses, review employment documents such as personal files, visit the work site or engage in other efforts to find out what happened. EEOC Mediation After completing its investigation, the EEOC often tries to resolve disputes through mediation. Mediation is a non-binding process where a mediator tries to get everyone to agree upon a settlement. At an EEOC mediation, the parties meet with a mediator to try to negotiate a resolution. It doesn’t always work because sometimes the parties are unable to reach an agreement. Dismissal or Determination If the EEOC is unable to resolve the case through mediation, they typically issue one of two letters: (A) a Dismissal and Notice of Rights or (B) a Letter of Determination. A Dismissal and Notice of Rights is issued when the EEOC is unable to find any solid evidence of discrimination. This does not mean that the case lacks merit. It means that the EEOC, with its limited resources, is unable to find enough evidence to prove that discrimination occurred. A right to sue letter is included which gives you the right to pursue your case in court. A Letter of Determination is issued in those rare cases where the EEOC finds compelling evidence of discrimination. A right to sue letter is included. Note: A Dismissal and Notice of Rights letter does not mean that the case lacks merit. It means that the EEOC, with its limited resources, is unable to find enough evidence to prove that discrimination occurred. See If You Have An Employment Case Talk with one of our experienced attorneys to determine if you have a case or not. Contact Our Attorneys CHAPTER 3 Employment Discrimination Lawsuits Employment discrimination lawsuits are nasty, expensive, slow and often ineffective. Most people do not enjoy the process. So you might want to give careful consideration before filing a case. Here are a few things to consider. Do you have solid evidence to prove your case? For example, if you believe that you were fired due to your age, you will need to back this up with compelling proof. Do you have evidence such as emails, texts or videos showing that your age was the reason for your termination? The burden of proof is on you so make sure you have it. Did something seriously bad happen to you? Discrimination happens in the workplace every day. People all over the country are exposed daily to discriminatory comments, lost opportunities, and other setbacks and indignities. But its usually not worth suing over this kind of thing unless you are seriously harmed. Typically, the only thing that will justify a lawsuit is getting fired from a good job due to discrimination. Note: A Right to Sue Letter Gives you the Right to Sue Your Employer. Deciding if […]

Employment Law Blog

Your Employment Rights: A Guide for Workers

Mar 20, 2020 | By Ottinger Employment Lawyers | Read Time: 13 minutes

If you are reading this, it’s probably because you’re facing a work-related problem. Maybe you’re worried that you’ve been discriminated against in the hiring process because of your race, gender, sexual orientation, or disability. Maybe there’s a problem with the way your company has been treating you, how much they’ve been paying you, or how many hours they ask you to work. Maybe you’ve just lost your job, and the reason doesn’t seem fair. This guide is designed to help you access the information you need to understand your employment rights and protections under the United States’ employment laws. In our opinion, the best kind of legal advice addresses problems before they get out of hand, keeping people in their jobs and out of the courtroom. We hope this guide will give you the legal know-how necessary to resolve your workplace problems without too much fuss. That said, we understand that some work-related issues cannot be resolved without help from legal professionals. If that’s your situation, we hope that this guide will help you understand how you can use the law to protect your rights and defend your interests. Employment law sets mediates relationship between companies and their workers. There are many different aspects to this relationship and, unfortunately, many different ways it can go wrong. Click on the links below to find about more about your rights and protections in each area of employment. Employment At Will and Why You Have No Right to Your Job Many employees believe that the law protects them from being fired without notice or without reason. Unfortunately, most employees are employed “at-will” meaning that they do not have the benefits of such protections. If you are employed at-will (and most employees are), your employer can terminate you without cause, without notice, and at any time. On the other hand, you also have the right to quit at any time, without giving a reason. Generally, unless your employer has specified that you are not at-will, the law presumes that you are. At-will employment is the rule, not the exception to it. This can be discouraging news for employees who have just been laid off without explanation or without notice. The good news is that even at-will employers do not have the right to fire their employees for illegal reasons (such as due to discrimination, or in retaliation). If you believe your employer may have illegally fired you, please contact an attorney to discuss your options. At-Will Employment (New York) At-Will Employment (San Francisco) For more information on at-will employment, including how to determine if you are not an at-will employee, please see these articles, or watch the video linked below: Fired at Will – You Can Be Fired for any Reason Employment Rights – Pay and Hours We all work for at least one reason — to get paid. However, a lot of us don’t understand the laws that regulate our wages and the hours we work. So, where do these regulations come from? The Fair Labor Standards Act, or FLSA, is the backbone of your right to fair pay for the hours that you work. The FLSA is a federal law, so it applies nationwide. This law establishes: the 40 hour week, the rules for overtime pay, the minimum wage, restrictions on child labor, equal pay for equal work done by a man or woman, and the standards for pay for time off work. State and local laws may provide greater degrees of protection, but the FLSA sets the minimum standard across the country. These protections have some restrictions — such as on who qualifies for overtime pay or who qualifies as an “employee” (versus an independent contractor) — and we have elaborated on those questions on our practice area pages (linked below). As always, if you have specific or detailed concerns about your particular situation, please don’t hesitate to contact an attorney for a free consultation to discuss your options. Explore these articles to learn more: Minimum Wage in San Francisco Overtime in New York Employment Rights – Discrimination Federal law prohibits employers from discriminating against their employees on the basis of things like race, national origin, sex, disability, etc. State laws frequently provide additional or more specific protections. For example, in California and New York, state law stipulates that employers cannot discriminate against people for being married or unmarried, or on the basis of their involvement with the military. Unfortunately, discrimination still happens despite the existence of these laws. So what is discrimination? It can manifest itself in a number of different ways, but, basically, it includes any action that adversely impacts an employee or a job candidate — such as firing, denying a promotion, or refusing to hire someone — and is also prejudicial or biased in motivation. Sometimes, discrimination is fairly obvious. At other times, discrimination can be subtle and unintentional; your employer may not realize that you are being impacted. Either way, you have the right to pursue legal options to address the discrimination. For more information on discrimination and your legal protections, please see this article: Workplace Discrimination in New York and San Francisco Employment Rights – Family and Medical Leave Life happens, and sometimes you need to take time away from work to deal with the ups and downs that life brings. The Family and Medical Leave Act (or FMLA) is federal legislation that provides you with the right to take time off work for the family health issues, births, and adoptions that shape the lives of workers. This section explains when you are entitled to a leave of absence, what protections you have while on leave, and what to do if your employer does not uphold your rights. What events entitle you to family or medical leave? There are two situations when you are eligible for leave under the FMLA: When welcoming a new member to the family through a birth, adoption, or foster placement; and When you or a family member are facing serious health problems. Medical leave […]

Employment Law Blog

California Commission Disputes

Mar 20, 2020 | By Ottinger Employment Lawyers | Read Time: 4 minutes

Commission disputes are all too common in California. The threshold question in most of these cases is do the commissions at issue constitute earned wages under the California Labor Code? What is a “Commission”? In order to answer this question, let’s first look at what counts as a “commission” under California law. Section 204.1 of the California Labor Code states, “Commission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.” Section 2751 specifies that “commissions” do not include the following: “(1) Short-term productivity bonuses such as are paid to retail clerks. (2) Temporary, variable incentive payments that increase, but do not decrease, payment under the written contract. (3) Bonus and profit-sharing plans, unless there has been an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed.” When is a Commission “Earned”? Determining when a commission is earned is often critical for executives who have left their employer with outstanding commissions. If the commission is deemed earned at the time they leave the company, they most likely have the legal right to the commission. If the commission was not earned at the time of their departure then they will forfeit the payment. According to California law, classifying a commission as “earned” is a matter of contract between employer and employee. In Koehl v. Verio, the court held, “A commission is ‘earned’ when the employee has perfected the right to payment; that is, when all of the legal conditions precedent have been met. Such conditions precedent are a matter of contract between the employer and the employee…” Likewise, Sciborski v. Pacific Bell Directory states clearly that once the contractual obligations are fulfilled, the commission is considered a wage: “[O]nce the express contractual conditions are satisfied, the commission is considered a wage.” The courts have traditionally deferred to the language of the contract in determining when a commission is “earned” – for example, courts have held that employers are legally allowed to require customers to submit payment before a salesperson “earns” the commission in question. Thus, once employees fulfill their contractual obligations, their commissions are typically deemed “earned.” And once commissions are “earned,” they are protected by the California Labor Code. In fact, California courts have held that section 221 of the Labor Code prohibits an employer “from collecting or receiving wages that have already been earned by performance of agreed-upon requirements.” Thus, once an employee fulfills all its contractual requirements, thereby earning the commission, an employer is required to pay the commission to the employee. Retroactive Commission Changes Some companies attempt to alter an employee’s commission after a deal has been closed. This normally occurs after a commissioned sales employee closes an unusually large transaction. Is it legal to lower the commission after the employee has done the work? The answer is not always clear. While courts generally give deference to the language of the contract, courts have also refused to allow employers to apply changes to commission plans retroactively. In Mathews v. Orion Healthcorp Inc., the court for the northern district of California held that “Although the commission plans contained a clause reserving to Defendant the right to unilaterally change the plans, such a clause is contrary to California law if applied retroactively.” To come to its conclusion, Matthews cited a previous case that dealt with changes to a commission plan, Asmus v. Pacific Bell. In Asmus, the court relied on contract theory, specifically the notion of a contract as “illusory,” to arrive at its ruling. The Asmus court held that “an unqualified right to modify or terminate the contract is not enforceable. But the fact that one party reserves the implied power to terminate or modify a unilateral contract is not fatal to its enforcement if the exercise of power is subject to limitations, such as fairness and reasonable notice.” Citing this section from Asmus, the Mathews court held that “Defendant’s reserved right to modify the commission plan could not extend to past earned commissions under California law, and there is no dispute of fact that Plaintiff satisfied the conditions precedent to qualify for the commissions due to be paid.” The point here is that the terms of a commission plan will govern unless the agreement gives the company the unfettered right to make retroactive unilateral changes. Pfeister and Vinson: Are Commissions Plans Enforceable Contracts? As the rulings in Asmus and Mathews demonstrate, the courts have generally refused to allow employers to modify commissions plans retroactively. In order to deny employers this right, the courts started from the position that the incentive commission plans it dealt with were enforceable contracts. However, there has been a thread of subsequent cases pushing back on this conception of incentive plans. In such cases, courts have interpreted commission plans between employer and employee not as a matter of enforceable contract at all. Therefore, employers in these cases were not required to pay employees commissions according to the terms of the incentive plans. In Pfeister v. Int’l Bus Machs. Corp, Plaintiff worked for IBM and had a dispute over Q4 commissions earnings. IBM originally set Plaintiff’s Q4 signings quota to approximately $2.8 million. IBM then increased this quota to $10 million in February of the following quarter. When applied to Plaintiff’s Q4 sales, this retroactive change had the effect of reducing his commissions by nearly $400,000. In this case, the court denied Plaintiff’s claim for breach of contract on the grounds that the incentive plan was not an enforceable contract. To reach this position, the court discussed two principles characterizing an enforceable contract: (1) Mutual assent or consent of the parties to enter into a contract; and (2) sufficiently definite terms. Regarding (1) mutual consent of the parties, the Pfeister court held that, because the incentive plan stated it “does not constitute an express or implied contract or a promise by IBM to make any distributions under it,” IBM did not consent to form a contract with Plaintiff. Likewise, regarding (2) sufficiently definite terms, the court stated that, because the incentive plan granted IBM the right “in its sole discretion to change sales performance objectives…[and] the right of IBM in its sole discretion to adjust the incentive payment,” the incentive plan did not contain sufficiently definite terms. Because the incentive plan contained neither (1) mutual consent of the parties or (2) sufficiently definite terms, the court did not recognize the incentive plan as an enforceable contract. In refusing to recognize Plaintiff’s incentive plan as an enforceable contract, the Pfeister court dismissed Pfeister’s breach of contract claim. In Vinson v. Int’l Bus Machs. Corp, a 2019 commission dispute again involving IBM, the court similarly sided with IBM. Like Pfeister, the Vinson court again held that the incentive plan in place did not constitute an enforceable contract, because IBM reserved the right to change the plan’s features and modify or cancel the plan. Conclusion As discussed previously, once a commission is considered “earned,” this triggers wage protections under California law. As cases like Koehl and Sciborski demonstrate, determining when a commission is “earned” is typically a matter of contract between employee and employer. While the courts generally defer to the language of the contract in deciding when a commission is earned, the Mathews court offered some protection to employees. Mathews relied on contract law principles cited in Asmus to deny employers the unrestricted right to apply changes to commission plans retroactively. But some commission plans, such […]