Finally – A New Federal Law is On the Way that Should Actually Help Employers!

On April 27^th the House of Representatives overwhelmingly passed the “Defend Trades Secrets Act” (DTSA), paving the way for a federal statute employers can use to bring civil lawsuits for theft of their trade secrets. Currently, employers’ recourse against employees and others for misappropriating company trade secrets, as opposed to patent and copyright infringement, for example, is through state laws. While many state laws protecting trade secrets are based on a uniform template that makes them similar, differences in these laws still occur. Beyond the challenges for employers trying to protect their trade secrets in an interstate and global economy through a patchwork of state laws, access to federal courts for these claims is limited. Therefore, perhaps the greatest impact of the DTSA will be the uniformity of a federal law and access to federal courts capable of transcending state lines in litigation over the theft of proprietary company information that qualifies as a protectable “trade secret,” as well as a more aggressive enforcement scheme.

President Obama is expected to sign the DTSA into law when it reaches his desk. This is some rare good news for employers who all too frequently have come to expect that the passage of a new law will mean greater government oversight or litigation against them. However, this new federal law will not preempt existing state trade secret laws.  Consequently, employers may have more than one avenue in which to pursue those who would misappropriate their trade secrets. Under many state laws, a “trade secret” is defined as:

[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The definition of a trade secret under the DTSA is similar.  Thus, depending on these details anything from customer lists, to pricing schemes, to production processes may qualify for protection.  However, both the DTSA and virtually every state trade secrets law require fairly extensive efforts on the part of employers aimed at maintaining the secrecy of information before it can be protected.  Because employers can control whether or not they take appropriate internal measures to protect their highly proprietary information, it is crucial that management implements practices and policies that allow them to take advantage of the business protections afforded under existing state and, now, this anticipated and welcome new federal law.  However, a caveat is that under the DTSA, employers are required to notify employees in any contract or agreement governing the use of trade secrets or other confidential information, of their immunity from liability for confidential disclosure of a trade secret to the Government or in a court filing (made under seal).

Questions? Contact Attorney James B. Sherman at (952) 746-1700 or email jasherman@wesselssherman.com.

CEO Sentenced to 1 Year in Prison and $250,000 Fine for Safety Violations in Massey Mine Blast

Massey Energy’s CEO, Don Blankenship, received the maximum sentence for engaging in a “dangerous conspiracy” to “willfully violate mandatory mine health and safety standards” before a deadly mine explosion that killed 29 individuals.  Blankenship was accused of placing profits before safety, and putting pressure on workers to look past hazards.  Blankenship was not charged with directly causing the explosion, and was cleared of the more serious charges of submitting false statements to the U.S. Securities and Exchange Commission, or he would have faced a significantly longer prison sentence.  In light of this ruling, management and business owners should take heed that their conduct in handling safety issues in the workplace may be subject to scrutiny following an accident, and cutting corners with regard to safety, or creating an atmosphere where employees feel encouraged to do so, could lead to being held personally, criminally accountable.

Questions on safety or other issues? Contact attorney James Sherman at (952) 746-1700 or email jasherman@wesselssherman.com

DOL Publishes New Employer’s Guide to the FMLA

This week, on April 25th the DOL published The Employer's Guide to the Family and Medical Leave Act (pdf).   This guide was “designed to provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.”  This is welcome guidance, as administration of the FMLA has given employers headaches since its enactment in 1993.  The publication of this guide follows the 2012 publication of a guide by the DOL for employees to assist individuals in pursuing their rights under the FMLA.

This new guide for employers follows along the chronological path of a typical FMLA request and leave process, and answers some common questions along the way.  It also contains graphics and charts, and links to the DOL’s more comprehensive FMLA regulations and forms.  This guide is an improvement over the even more voluminous regulations implementing the FMLA; however, it still is over 70 pages and does not answer all the questions that employers are bound to encounter administering this complicated law. 

For those employers who do not have the time (or patience) to read either the DOL regulations or this new guide, there is Wessels Sherman’s one-of-a-kind phone consultation program!  Our phone clients regard this service as the perfect resource for help with compliance with the nuances of complicated laws such as FMLA, ADA, or any number of the troubling employment law issues that can arise almost on a daily basis in the workplace.  For more information on our unique and valuable phone program, contact our office at (952) 746-1700.

Challenges to the DOL’s Persuader Rule

The Department of Labor finalized changes to its controversial “persuader” rule, requiring employers and their labor consultants, including attorneys, to report any arrangement to directly or indirectly persuade employees regarding unionization.  Many attorneys object that this requirement would violate attorney-client privilege, and the rule is already facing multiple challenges in courts across the country, including at least one in Minnesota. 

The previous rule only required these arrangements to be reported if the consultant directly communicated with employees, but under the new rule—which is set to take effect on April 25, 2016, and apply to any arrangements, agreements, and payments made on or after July 1, 2016—expands this requirement so that if consultants merely advise management on how to communicate with employees, this will need to be reported as wall.  The court challenge is attempting to block the rule before it goes into effect. 

Questions? Contact Minnesota attorneys at (952) 746-1700 or email jasherman@wesselssherman.com

Recent 8th Circuit Decision Affirms that Obesity, on its Own, Is Not a Disability

Most human resources professionals and employment lawyers recognize that an employee or applicant that is overweight to the point of being obese, may well be considered “disabled” under the Americans with Disabilities Act (ADA).  If disabled, it follows that such individuals are entitled to reasonable accommodations as may be needed to perform the essential functions of the job.  But according to a very recent decision from the U.S. Court of Appeals for the 8^th Circuit (which covers Minnesota, Iowa and the Dakotas, among other states) the fact that an individual is obese, even morbidly obese, does not necessarily mean that he or she is “disabled” within the meaning of the ADA.  In Morriss v. BNSF Railway Co. (April 5, 2016), the court held that in order to qualify as a “disability,” obesity must result from an underlying physiological disorder or condition.  As the court put it, being overweight – “no matter how far outside [the normal] range” – does not, standing alone, meet the definition of a physical “impairment.”  Addressing the Equal Employment Opportunity Commission’s (EEOC) position in its “friend of the court” brief, the court rejected the conclusion that morbid obesity constituted a disability regardless of the cause.  Instead, according to this new decision obesity of any level, whether termed “severe,” “morbid,” or “class III” obesity, is not a disability absent some underlying physiological disorder or condition.  Qualifying examples of physiological disorders or conditions, would include  hypothyroidism, Cushing’s syndrome, etc.

This recent decision is consistent with decisions from the Courts of Appeals for the 2^nd and 6^th Circuits.  However, these two earlier decisions came prior to the ADA Amendments Act of 2008, which significantly expanded the definition of who qualifies as “disabled” under the law, whereas the 8^th Circuit’s decision in Morriss, was issued just this month, on April 5, 2016.  However, despite this broadened definition of disability, and the EEOC’s change of position on the issue as a result of the amendments, the court held that the requirement that obesity be caused by a physiological condition in order to be a disability, remained unchanged.

Although the individual in this case was not disabled, if obesity is the result of a physiological disorder, it could be a disability, and it could also cause other disabilities, such as diabetes, sleep apnea, hypertension, or heart disease.  As a result of this decision, employers who assume that obese applicants or employees are automatically disabled, may unwittingly: (a) pursue accommodations where none may be required; or (b) risk liability under the ADA’s “regarded as” disabled prong, if they assume that the individual has an “impairment,” and adverse action is taken.   Because of this, employers faced with an accommodation request from an obese individual should look further at medical documentation, not only to verify the need for an accommodation, but also for the underlying cause of the obesity. For assistance in dealing with questions regarding disabilities, contact James Sherman, at (952) 746-1700 or email jasherman@wesselssherman.com. 

Legislative Update: Some Illinois Employers Must Now Post a Notice on Human Trafficking

April 2016
By Anthony J. Caruso, Jr., Esq.

The trafficking of human individuals for the purpose of slavery and/or prostitution is a horrendous crime against humanity. A new Illinois law seeks the help of Illinois businesses to combat such trafficking.

The Human Trafficking Resource Center Notice Act become effective January 1, 2016.

WHAT EMPLOYERS/BUSINESSES ARE COVERED UNDER THE LAW? 

• Liquor Stores
• Adult Entertainment Facilities
• Airports, Bus Stations, Rail Stations and Truck Stops
• Emergency Rooms and Urgent Care Centers
• Farm Labor Contractors and Privately Operated Job Recruitment Centers

WHAT MUST THE COVERED EMPLOYER/BUSINESS DO UNDER THE LAW?

• Post a Notice with the National Human Trafficking Resource hotline number in a conspicuous place.Notice must be at least 8 ½ by 11 inches in size, written in a 16-point font.
• Notice must be posted in English, Spanish and in one other language that is the most widely spoken in the county where the establishment is located and for which translation is mandated by the federal Voting Rights Act.
• Notice must state the following:
• If you or someone you know is being forced to engage in any activity and cannot leave, whether it is commercial sex, housework, farm work, construction, factory, retail, or restaurant work, or any other activity, call the National Human Trafficking Resource Center at 1-888-373-7888 to access help and services.

WHAT IS THE PENALTY FOR FAILING TO POST THE NOTICE? 

• A civil penalty of $500 for a first offense and $1,000 for each subsequent offense to be enforced by the Illinois Department of Labor.

As such, the Illinois Department of Labor has a model notice available for download on the Department’s website: https://www.illinois.gov/idol/Laws-Rules/FLS/Pages/Human-Trafficking-Resource-Center-Notice-Act.aspx.

Under this new law, some Illinois employers have another Notice Poster to be placed in the workplace. Be careful to comply if you are covered under this law.

Questions? Contact Anthony J. Caruso, Jr. of Wessels Sherman’s St. Charles office at (630) 377-1554 or via email at ancaruso@wesselssherman.com