Tag Archives: employer

Can an employer enforce a restrictive covenant, non-compete agreement or confidentiality provision against an employee who has been laid off?

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Can an employer enforce a restrictive covenant when the employee was terminated involuntary and without cause? Restrictive covenants are frequently utilized by employers to prevent an employee no longer with the company from negatively impacting the company. Restrictive covenants come in various forms some examples of which include, but are not limited to, covenants not to compete or non-compete agreements, confidentiality provisions, and non-solicitation agreements.

Both New York statutory and case law remain unclear on this issue. In Post v. Merrill, Lynch, Pierce, Fenner & Smith which was decided in 1979, the Court of Appeals held that it would be unreasonable to enforce a restrictive agreement if the employee’s termination was involuntary. Therefore, the forfeiture of the accumulated pension benefits due to the employee’s breach of a non-compete agreement was not enforceable. Several courts have cited Post when denying the enforcement of restrictive covenants where an employee’s termination was involuntary.

Generally, New York Law is not very supportive of restrictive covenants. The rational is that it restricts an employee’s right to earn a living which is a person’s fundamental right. The fact is, however, that these types of agreements will be endured and are therefore enforceable, provided certain conditions are met. To determine whether a restrictive covenant is valid and enforceable, New York and the majority of jurisdictions use the reasonableness standard. The Court of Appeals used several factors to determine the circumstances under which a restrictive covenant is reasonable and therefore lawful. The Court considered, among other relevant factors, the legitimate interest of the employer versus whether there is an undue hardship on the employee.

            An exception to the reasonableness standard is the employee choice doctrine. The employee choice doctrine is based on the concept that where the employee’s termination is voluntary, he or she exercised discretion to accept the terms associated with his or her decision to separate from employment. Therefore, it is the employee’s choice to comply with the covenant and to receive the benefits or to violate the covenant and accordingly forfeit the benefits. In this context, the court must determine if the employee’s forfeiture of benefits is reasonable if there was an involuntary termination without cause. Furthermore, the New York Court of Appeals held that the employee choice doctrine is inapplicable where an employer deliberately creates an intolerable work environment that would effectively force a reasonable person to quit.

If you have further questions regarding covenants not to compete, confidentiality, or other restrictive covenants, call Gilbert Law Group at 631.630.0100.

 Contributed by Sakine Oezcan

Does Perception Equal Reality for Title VII Employment Discrimination?

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One major difference between the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964 is that the ADA explicitly protects employees who are discriminated against because of an employer’s perception that they are disabled, although in reality they may not be. Title VII employment discrimination, on the other hand, does not recognize the concept of an employer discriminating against an employee based on that employer’s perception that an employee is a member of a protected class. Accordingly, a Title VII plaintiff historically has a higher burden of proof in establishing their prima facie case. Traditionally, although the same act of “discrimination” would not be the basis for an employment discrimination cause of action where the worker is not a member of a protected class, recent case law has demonstrated a trend towards expanding protections under Title VII to include an employer’s perception that an employee is a member of a protected class.

Two recent cases in particular are illustrative of this trend in employment discrimination. In Kallabat v. Michigan Bell Telephone Co., a federal judge ordered that a Michigan man’s case on perceived religious discrimination go forward. Mr. Basil Kallabat, a dark-skinned man of Iraqi descent, and a self-proclaimed non-Muslim, suffered an adverse employment action while working as a customer service representative. Even though a Title VII claim based on his color, gender, or national origin would be unimpeachable, Mr. Kallabat’s claim centered on an element of perceived religion. The plaintiff claimed that when he wore a hat backwards and a co-worker said it looked like a “topi” (a skullcap worn by Muslim men for religious reasons) and other workers starting laughing at Plaintiff as a result. Further, on another occasion, there was graffiti etched into the door of a bathroom stall of one of Defendant’s offices depicting two buildings similar to the Twin Towers with a plane hitting one of them and a caption that stated that the plaintiff is learning how to fly. After learning of the graffiti, the Area Manager said that Plaintiff was oversensitive, emotional, and unable to take the joke during a crew meeting. The Court denied the defendant’s motion for summary judgment, holding that a reasonable jury could find that the incidents are evidence of discrimination based on the perception that Plaintiff was a Muslim. Similarly, in Arsham v. Mayor & City Council of Baltimore, an Iranian engineer’s perceived Title VII claim survived summary judgment on the basis that her supervisor’s mistaken belief that she was Indian, and not Iranian, should not save the employer from Title VII liability.

With this potentially looming expansion of workplace religious employment discrimination protection, it is imperative that both management and employees know their respective rights as they relate to federal, state, and municipal ordinances. The Gilbert Law Group can help you navigate this fast changing legal arena.

 Schedule a consultation by calling (631) 630-0100.

 Contributed by Michael B. Engle

SYSTEMATIC WAGE THEFT BY BRONX PAPA JOHN’S FRANCHISEE LEADS TO JAIL TIME, AG SCHNEIDERMAN’S FIRST CRIMINAL WAGE AND HOUR CASE

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Employees who earn hourly wages are entitled to minimum wage and time-and-a-half for overtime, among other guarantees. When employers skirt this rule by misclassifying workers as independent contractors (whether intentionally or negligently), most penalties are limited to the civil realm. In other words, the employers will have to pay the difference to all affected workers, a fine to the U.S. Department of Labor, and other expenses arising out of the episode. For the first time, the Office of the New York State Attorney General recently secured criminal charges in a wage theft case, over and beyond these civil penalties.

 Abdul Jamil Khokhar owns nine Pizza Papa John’s franchises in Bronx, NY, under his company BMY Foods, Inc. Mr. Khokhar had been under investigation since 2013 for failing to pay and report overtime premiums. While his workers appear to have been lawfully paid for regular hours, Khokhar’s criminal scheme involved making overtime payments in cash, under fictitious names corresponding to the workers on the payroll, and at the regular hourly rate. Furthermore, Khokhar’s filed tax returns did not include any references to the pseudonymous workers, meaning that Khokhar represented that his workers worked up to, but not past, the overtime threshold—which Attorney General Eric T. Schneiderman disproved.

 On July 15, 2015, Khokhar pled guilty to his scheme. He will be sentenced on September 21. As a result, Khokhar will spend sixty days in jail, pay $230,000 in back pay to his employees, pay the same amount in additional liquidated damages, pay another $50,000 in other civil penalties, and BMY Foods, Inc. will have to designate an internal compliance officer and submit to independent audits.

 Wage theft is a crime that can result in substantial liability to the employer. Meanwhile, hourly employees are entitled to minimum wage and overtime premiums. The requirements placed on employers by the Wage Theft Prevention Act go much further however, than merely ensuring an employee is paid minimum wage and time and a half for overtime. If you need help in pursuing or defending a wage theft claim, do not hesitate in calling the Gilbert Law Group, (631)630-0100.

Contributed by Michael B. Engle

WHAT COULD BROWN HAVE DONE FOR RELIGION? EEOC BRINGS CLASS-ACTION RELIGIOUS DISCRIMINATION LAWSUIT AGAINST UPS, Contributed by Michael B. Engle

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In a continuation of its evident agenda to expand protections for religious discrimination, the EEOC has set its sights on the UPS. United Parcel Services (UPS) prides itself in being masters of logistics. UPS drivers are encouraged to take three right turns instead of one left turn in order to not have to idle in traffic, are taught how to buckle their seat belts while starting their trucks in order to save time, and are held accountable for almost every action they take while on the job. In its pursuit of uniformity, UPS also has a dress code and grooming policy for its employees, but according to the U.S. Equal Employment Opportunity Commission (EEOC), UPS is unlawfully stalling on accommodating some of its drivers’ sincerely held religious beliefs. Discrimination based on religion has become a developing area of workplace law.

Last June, the EEOC won a Supreme Court case against Abercrombie & Fitch, on behalf of a young Ms. Samantha Elauf, of Tulsa, OK. In Elauf’s case, she interviewed for a position while wearing a hijab (a head covering, as worn by some Muslim females), and was not hired. Abercrombie claimed that it could not accommodate the hijab without compromising their “look book” to which its employees must adhere, but the EEOC prevailed, on the theory that this practice unduly discriminated against Muslims, in violation of Title VII of the Civil Rights Act of 1964.

 The EEOC’s new Title VII claim against UPS is a class action claim, on behalf of Muslim, Rastafarian, and other employees who have been injured by UPS’s strict grooming policy. As UPS’s policy currently stands, male supervisors, as well as male truck drivers who interact face-to-face with customers, are prohibited from wearing beards and from growing their hair below collar length.

 The EEOC cites anecdotes from two victims. In 2005, a UPS hiring official in Rochester, NY alleged told Bilal Abdullah, a Muslim, that “God would understand” if he shaved his beard to get a driver helper job, and could instead seek a package handler job that required no customer contact. UPS hired him for neither position. Meanwhile, in Fort Lauderdale, FL, a Rastafarian part-time load supervisor claims that his manager “didn’t want any employees looking like women,” in objection to his dreadlocks.

 While UPS currently claims that it “is confident in the legality of its employment practices,” it is imperative that employers act carefully in order to avoid litigation. If you feel that your employer’s rules discriminate against your religion, or if you are the employer and want guidance in your policies, contact the Gilbert Law Group today, (631)630-0100.

Department of Labor Proposes to Double Income Level for Salaried Employees to be Exempt From Overtime and Minimum Wage

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On July 6, 2015, the U.S. Department of Labor announced its proposal to double the income level required for an employee to be exempt from overtime and minimum wage requirements. It is important to note that this is merely a proposal, and not an official rule. But it demonstrates how serious the DOL is as it relates to updating the exemptions. Also it should put employer’s on notice to pay attention as these changes could significantly impact business of all shapes and sizes.

Under the new proposal, the minimum weekly salary for exempt employees, presently $455 per week or $23,660 per year (http://www.dol.gov/whd/overtime/fs17a_overview.pdf), would increase to the 40th percentile of weekly earnings for full-time salaried workers in the United States, estimated to be $970 per week or $50,440 per year in 2016. Further, the minimum annual salary required for the Highly Compensated Employee exemption, presently $100,000 per year (http://www.dol.gov/whd/overtime/fs17h_highly_comp.pdf), would increase to the 90th percentile of weekly earnings for full-time salaried workers in the United States, which is currently $122,148; and these compensation requirements would automatically increase annually in the future based on a yet to be determined formula. The DOL also announced that it is considering, revising the job duties required for exempt employees, and whether non-discretionary bonus or incentive pay should be considered toward the minimum salary requirement for Highly Compensated Employees.

If you have any questions or concerns regarding how these changes can impact your business, call Gilbert Law Group today, (631)630-0100.

Employers Be On Alert: Employment Retaliation Claims Are At an All-Time High

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Employers be on alert: employment retaliation claims are at an all-time high.

The number of discrimination charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) in the past year reached the lowest level since 2007, based on published statistics from the EEOC. Retaliation charges, on the other hand, are at their highest percentage ever of claims filed ever.

The EEOC’s Strategic Enforcement Plan for fiscal years 2013-2016 lists retaliation issues as one of six areas of priority for the agency. The EEOC describes this priority as “targeting policies and practices which discourage or prohibit individuals from exercising their rights under the employment discrimination statutes or that impede EEOC’s enforcement efforts.”

The 2014 statistics, and the priority placed on EEOC retaliation enforcement, are a significant reminder that employers should take the necessary steps to minimize the chance of a retaliation claim even when the underlying discrimination claim is not meritorious. Employers should make sure to consult a knowledgeable employment attorney to ensure their employment policies are up to date. Where there is an active discrimination claim against an employer, there are many acts which if taken, could constitute retaliation. In such circumstances, is important that the that an employer seek counsel before taking action.