Recently in Employment Contract Category

October 25, 2013

Massachusetts Non-Compete Clause Litigation on the Rise

The Wall Street Journal recently reported there has been a 60 percent spike in the number of non-compete clause litigation actions filed against departing employees in the last 10 years.
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Our Boston business lawyers know that while some view these actions as a way to insulate companies from theft of trade secrets or the heist of business relationships or customer data, others see it as stifling entrepreneurship and healthy corporate competition.

The truth is probably somewhere in the middle, and varies on a case-by-case basis.

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August 23, 2012

Boston Employment Law: The Deal With Sick Time

New business owners in Boston may find themselves grappling with a host of legal questions. stethascope.jpg

Our Massachusetts business lawyers know there are issues of zoning, licensing, certifications, inspections, taxes and other elements that have to be worked out before you can even open your doors.

Another issue that frequently arises is the question of whether employers must provide sick time to their workers. The fact is, state law doesn't mandate that private sector businesses must provide this benefit to workers, although many do because it's popular and it's a good way to get - and keep - good employees. Federal laws don't require it either. Some employers choose not to extend this benefit, and employees simply are not paid for the days they don't work.

However, keep in mind that if you do promise to pay it to your workers, you may have a legal obligation to pay it based on breach of contract laws.

Some courts have handed down rulings that indicate that if you publish a policy in your employee handbook specifying that employees will receive sick time, that constitutes an implied contract. It has in some cases been held as binding and therefore enforceable.

It's important to establish your policy before you begin hiring, and then clearly convey it to your employees. It's also a good idea to regularly evaluate it to ensure that your policy remains in line with current laws.

The reason many employers have opted out of sick time benefits is that employees have been known to abuse it by taking days off work when they're not actually sick. Other companies offer to "buy back" that time if it's unused, potentially encouraging workers not to use sick time when they actually are ill, thereby possibly sickening other employees as well.

It's also worth noting that if you're going to employ more than 50 people, sick time for your workers is covered under the Family Medical Leave Act, or FMLA. This is a federal law that allows employees who are eligible to substitute sick days for any part of a leave they take based on their own serious health condition or to provide care for a spouse, parent or child. It provides up to three months of time off, though it does not force employers to pay for this time. Many, however, do pay a portion.

In addition to the minimum 50-employee rule, FMLA requires that in order to be eligible, they must have worked at the company for at least a year and they had to have worked at least 1,250 hours over the last year.

Where you have to be careful is in how you spell out your policy to your workers. Back in 2008, one retiring employee in Massachusetts successfully sued his employer for breach of contract for failing to provide promised sick time benefits that the worker had accrued. Although sick time differs from vacation time under state law in that it is not considered "accrued," meaning you don't have to pay it if workers don't use it, the issue in this case was conflicting policy. The employer had multiple versions of its sick day policy in the employment manual. For this reason, the court ruled in the employee's favor.

Vacation time is another matter. Here again, employers aren't required to give employees this benefit. However if they do, it's considered an accrued benefit. So if an employee has unused vacation time and then chooses to leave the company, under Massachusetts law, he or she is entitled to be paid for it. There is, however, a "use it or lose it" clause in the law that allows employers to discharge the vacation time if it's not used within a certain period of time. However, that must be clearly stated in the policy, and time can't be discharged if the employee is trying to collect it as a result of termination.

The bottom line is that this is a tricky area of the law, and policy should be established and reviewed with your legal counsel prior to opening your business.

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June 10, 2012

Boston Contract Dispute Embroils Local Power Plant

A Boston employment dispute at a local power plant has resulted in stalled production, a worker lock-out and mounting tensions on both sides. powerstation.jpg

Massachusetts employment attorneys know that when dealing with labor unions, companies need to have aggressive legal muscle on their side. Still, the tone and manner of approach can be everything in these cases. The goal is to avoid a soured relationship, while still maintaining the company's best interests.

That's not happening here.

It involves the Pilgrim nuclear power plant in Plymouth and the Utility Workers Union of America Local 369.

Both sides are accusing the other of compromising public safety, and politicians are even beginning to weigh in on the issue, following management's decision to lock out union workers when contract talks dissolved for the second time in as many weeks.

Workers have taken to picketing, and legislators are calling out company officials, saying that barring those employees from entering has heightened security concerns at the nuclear site.

However, company officials have countered that the ball is actually in the union's court, as it can't have its workers on the job without a contract, due to mandatory federal license requirements. The company further said it has been bending over backward to negotiate with the union, offering wage increases and high-value health benefit plans. The parent company, Entergy, rakes in about $1 million each day from this power plant, and recently received a 20-year license renewal for its operation. It runs 10 others across the country.

Union members say the workers aren't on strike, but they have been picketing in at least three different locations near the plant.

The union even took it a step further by filing a complaint with the National Labor Relations Board, alleging five specific charges alleging, among other things, that security at the company has been secretly audio and video-taping picketing workers and that management has made threatening and coercive statements to union workers in recent weeks.

Additionally, the company is accused of altering the shift rotations of union workers without providing adequate notice, failing to provide all the relevant and necessary information to various union requests and altering health insurance and retirement plans for union workers.

Even if your company isn't dealing with a union, contract dispute issues can quickly become a public relations nightmare. There may be a temptation by company officials, particularly those in small businesses, to handle these alone. But an experienced attorney is going to be able to accurately express your legal standing and reasoning to any outside inquirers.

Employment and business law at both the state and federal levels can be complex, and you may not even be aware of all your legal obligations to your employees - or your legal rights as a company. This is where having an attorney with experience is going to ultimately pay off, whether you're working to establish employment and business contracts or settle disputes with your workers or other companies.

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February 21, 2012

Executive Fined For Not Disclosing Affair In Massachusetts Employment Contract Case

An executive with Raytheon Co. was recently fined by a court when he didn't provide a reprimand letter to opponents in a lawsuit that stemmed from an affair he had with a subordinate when both worked at the Federal Aviation Administration, Bloomberg Businessweek is reporting.

This case highlights the need for an experienced Boston employment law attorney, who can provide legal advice on how to write up employment contracts in order not only to comply with the law, but also to protect the company from possible problems later on.
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Massachusetts employment law compliance is a critical and complex issue for small businesses. This can be especially true when dealing with recruiters or when hiring or firing c-level administrators. A knowledgeable attorney can help you avoid the pitfalls -- which can go a long way toward avoiding employment law litigation in Massachusetts.

According to the news article, a man who led Raytheon's civil aviation unit allegedly violated a court order that said he had to turn over a document that proved he had a romantic relationship with a woman he worked with. The court ordered the document be turned over, but it wasn't.

In the midst of lawsuits, the company filing a lawsuit has argued that the relationship began at the FAA and continued after the two -- now married -- ran a contracting program to train air traffic controllers. Raytheon won the contract in 2008, though Washington Consulting Group Inc., which filed the lawsuit, had held it for more than 20 years.

The company is seeking more than $1 billion in damages from Raytheon and the man, alleging the relationship marred the bidding on the 10-year contract. The lawsuit claims the couple not only stole trade secrets, but conspired to fix who would receive the contract after bidding.

Raytheon has twice attempted to have the lawsuit tossed out of court. Since the mid-1980s, WCG and the University of Oklahoma have worked together to train air traffic controllers, providing two to four months of training in Oklahoma and then placing people in a two- to five-year program.

While this situation is specific, all of the details apply to businesses dealing with their employees. Writing up contracts is critical to ensuring the company is protected, but also to ensuring all the applicable terms of employment are properly laid out.

Employment Law: There are many aspects that deal with employment law, but contract disputes or wage issues are often some of the most common. If a contract is poorly worded or slapped together, it can lead to major problems in the future. A lawyer who has experience writing contracts is valuable in making sure the company is completely covered.

Compliance: A company not only must make sure they protect themselves from possible litigation, but also from problems with state or federal laws. Contracts must be correctly worded based on the law and applicable case law and employee handbooks, policy and procedure manuals, safety laws and other regulations must be taken into consideration.

Litigation: All of this goes to trying to avoid litigation. But there may be times when it is necessary either to be aggressive and take action to enforce a contact or set up a good defense to lawsuits. The ultimate goal is to reach not only a cost-effective resolution, but also one that is fair and just.

In all of these areas, an experienced Boston employment law attorney must be consulted. The future of a business is not only affected by its product and work, but also how well it is protected against potential litigation or compliance issues in dealing with employee contracts.

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October 11, 2011

Legal Advice Critical for Small Business Startups in Massachusetts

Boston business attorneys note small business economic confidence posted its first gains in seven months in September as outlook for sales improved and businesses prepare for the holidays.

Reuters reports the National Federal of Independent Business said fewer small businesses expect sales to decline. The recession from which the country is still trying to emerge has been a precarious time to start a business. Yet statistics show that this recession, like the ones that have come before it, continues to incubate small businesses. In many cases, laid off or downsized employees have struck out on their own out of necessity. In other cases, other factors made it the right time to launch an enterprise. 1200761_main_street_vs__wall_street.jpg

The BBC recently reported that employees in both the U.S. and Europe are increasingly turning to starting their own business as a way to better ensure their own job security amid today's unforgiving corporate climate. While the U.S. unemployment rate sits at more than 9 percent and Congress debates job proposals of varying credibility, the number of new businesses is growing at the fastest rate in 15 years.

Such businesses are the driving force behind the U.S. economy --accounting for 52 percent of the workforce, according to the Small Business Administration. Nearly 20 million workers are employed at companies with fewer than 20 workers. Another 20 million work at companies with fewer than 100 workers. Together they rival the 47 million who work at companies with 500 or more employees.

Still, the reality is that more than half of all small businesses fail during the first 5 years. Common reasons include:

-Lack of experience

-Poor location

-Over investment in fixed assets

-Poor credit availability

-Insufficient funding

-Personal use of business capital

-Unexpected growth

-Competition

-Low Sales

Tax and regulatory concerns can also play a part in small business failure, as can lack of access to experienced legal counsel. Business formation includes your choice of entity and is an important consideration. Formations include sole proprietorships, partnerships, limited liability corporations (LLC), S-corporations and C-corporations. Each has its pros and cons -- including tax implications.

Early stage coaching, business startup and planning and corporate finance are also critical aspects of getting a business off the ground. Complying with state and federal employment law is critical as well.

The challenging nature of starting a successful business means such ventures are often started by midnight CEOs -- someone who is hanging onto a steady job while launching a business in his or her spare time. In many cases, they are starting a business similar to the one in which they already work -- which can raise issues involving employment contracts, non-competes and other protective measures.

Most believe such ventures will offer them the job security not present in corporate America. And that can be the case -- just be sure you are launching your business with a solid legal foundation.

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September 27, 2011

E.I. du Pont de Nemours & Co. v. Kolon Industries: New England Trade Secrets Case Highlights Business Litigation Issues in Massachusetts

A New England intellectual property trial has resulted in a $919 million jury verdict for DuPont, believed to be the largest such verdict ever awarded.

In today's global economy, moving to protect your product rights is critical. Our General Counsel on Call services can assist startups as well as established businesses that are dealing with a wide variety of legal issues -- including employment law and business formation in Boston. For its part, South Korea-based Kolon is claiming that DuPont has violated antitrust law by using its size and market share to force out competition.

Bloomberg Businessweek reports jurors in a federal court in Virginia deliberated for two days before finding Kolon guilty of wrongfully obtaining proprietary information about Kevlar. 860421_police_search.jpg

DuPont began making Kevlar in the 1960s; initially it was used in racing tires. Today, DuPont sells about $1.5 billion of the fiber annually, primarily for use in body armor, bullet-proof vests and other military applications. The company accused Kolon of hiring former DuPont employees and of stealing proprietary information. A former DuPont engineer and marketing director, who went to work for Kolon, was sentenced to 18 months in prison after pleading guilty to theft of trade secrets and obstruction of justice.

Kolon began marketing its own bullet-proof fiber in 2005. The company was sued by DuPont in 2009 after DuPont notified the Federal Bureau of Investigation and the U.S. Department of Justice over what it believed was a theft of trade secrets and other proprietary information by a former employee. A raid of the employee's home allegedly turned up computer files and other product information belonging to DuPont.

DuPont is also seeking punitive damages for the theft of 149 trade secrets as well as reimbursement of more than $30 million in attorney fees and other secrets. It is also seeking an injunction preventing Kolon from marketing its products using DuPont information.

Kolon's rival product is called Heracron. The company claims DuPont has violated antitrust laws by forcing customers to purchase at least 80 percent of their Kevlar fibers from them. Kolon also claims it did not solicit trade secrets or use proprietary information. Rather, it claims the allegedly "secret" information is "public knowledge." While the theft of trade secrets can be devastating, so can being forced out of the marketplace by a larger competitor pushing an unfair advantage.

Court watchers say the large verdict suggests jurors thought the case was particularly egregious. It's the second such verdict this year; Mattel was ordered to pay $310 million to MGA over the Bratz Doll case.

Both cases involved former employees who went to work for the competition. A properly fashioned employment agreement in Boston is another critical tool in protecting trade secrets and other competitive advantages from falling into the hands of the competition.

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