Preventing Sex Discrimination: The Case for Implementing More Guard Rails

Ruth Binger

By Ruth Binger



One of the hottest topics today is the accusations of some form of sex discrimination – which includes sexual harassment and sexual assault – related to employment. From the entertainment industry to media organizations, professional services firms, restaurants, venture capital firms, legislative bodies, and many others, the problem is widespread – but it is not new. It is just an age-old story with new players.

Lawyers are brought in after the allegations are made. Those burning allegations must be dealt with very quickly under the law. The intent is to contain the fire by creating legal closure which, in most cases, involves settling the subject claim(s) through release agreements that contain confidentiality agreements and non-disparagement clauses. With respect to  advice to prevent sexual harassment in the future, lawyers often recommend a myriad of actions including  installing new leaders, overhauling management, conducing outside legal reviews into unreported claims, creating employee advisory committees, updating sexual harassment policies, offering  more employee services, and providing more training and education to employees. Depending on whether the ultimate decision maker sincerely “walks this talk,” this all could be simple symbolic noise.

Setting aside the allegations and rumored settlements, the common threads are as follows: Continue reading »

Is a LinkedIn Offer to Connect a Violation of a Non-Solicitation/Anti-Raiding Agreement?

Ruth Binger

By Ruth Binger



Today, marketing and sales are yoked through digital channels. Leads and customer relations are created and maintained on LinkedIn, Facebook, Twitter, Blogs, email, video calls, and chat rooms. Your salespeople use these tools to sell your products. Yet, change happens. Valuable salespeople with critical customer relationships and employee friendships will leave your company. Hopefully, when those employees leave your employ, you have non-competes and non-solicitation clauses in place which prohibit them from directly or indirectly soliciting employees or customers for a period of years after termination of employment.

You hear through the grapevine that your former super salesperson who just quit has an updated job status on LinkedIn. Now some of your employees and customers know where the former super salesperson is now employed. To add insult to injury, your former super salesperson has asked several of your employees to connect via LinkedIn. You are afraid of the Pied Piper effect and that more of your employees will leave you. Plus you paid good money for your lawyer to draft the darn non-solicitation agreement and you want your money’s worth!

How can you as an employer determine if your former salesperson is legally violating the non-solicitation agreement?

  1. Passive solicitation. Is the activity passive and what is the content and substance of the message conveyed? Most courts that have considered this issue have found that an update to an individual’s LinkedIn account is passive. But what about a new request to connect?In Bankers Life and Casualty Company v. American Senior Benefits, Bankers Life sued a former sales manager for updating his LinkedIn account and asking three former co-workers – current employees of his former employer – to connect. Bankers Life argued that asking existing employees to connect was targeted and it would uncover job listings of current employer. The sales manager argued that the connection request was a LinkedIn generic email simply asking to form a professional networking connection on social media. The court noted that the generic emails did not contain any discussion of Bankers Life, no mention of the new employer, and no suggestion that a job description be reviewed. Further, current Bankers Life employees had a choice whether or not to respond and connect, click on the former co-worker’s profile, or review job postings for the salesperson’s new employer. Accordingly, the mere act of asking someone to connect on a social network via a generic email generated by the network itself did not violate the non-solicitation agreement. In Pre-Paid Legal Services v. Cahill, the court held that posting on Facebook that an employee has moved and touting the new employer’s product did not constitute evidence of unlawful solicitation.Courts have also ruled that posting a job opportunity on a LinkedIn is not a solicitation and becoming “friends” with former clients on Facebook does not in and of itself violate a non-compete clause (Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp and Invidia and LLC v. DiFonzo).

Continue reading »

When Bad Guys Attack Small to Mid-Sized Businesses: 20 Data Protection Tips

Ruth Binger

By Ruth Binger



A cyber incident will happen to your company. It is not a matter of if, but when. Small businesses make an appealing target because hackers know they don’t spend as much on security as larger businesses and are not as careful.

According to a Towergate Insurance study, 82 percent of small business owners claim that they are not targets for attack because there is nothing worth stealing. However, employee personal data and health information and customer data are always worth stealing. Symantec reports that 43 percent of cyber-attacks worldwide in 2016 were against small businesses with less than 250 workers. In fact, cyber crooks try to rob bank accounts via wire transfers, steal customers’ personal identify information, file fraudulent tax returns, commit Medicare fraud, etc.

IBM estimates that nearly two-thirds of all cyber-attacks hit small to mid-sized businesses. More disturbing, the U.S. National Cyber Security Alliance estimates that about 60 percent of those hit are forced to close six months after an attack. A 2016 Poneman Institute Breach Report advises that the average price a small business has to pay after a cyber attack is about $690,000.

According to the 2017 Verizon Data Breach Investigations Report:

  • 75 percent of the breaches were perpetrated by outsiders (with 51 percent involving organized criminal groups) and the remaining involved internal actors.
  • 62 percent of the breaches involved hacking
  • 81 percent of breaches involving hacking leveraged stolen and/or weak passwords
  • Not surprising, malware installed via malicious email attachments was present in 50 percent of the breaches involving hacking
  • The victims of data breaches are:
    • Financial organizations (24 percent)
    • Health care organizations (15 percent)
    • Public sector entities (12 percent)
    • Retail and accommodations (15 percent)
  • One in 14 users are tricked into following a link or opening an attachment with 25 percent of the users making the same mistake twice

It’s all about the money: Perpetrators of data breaches steal and exploit sensitive data for financial gain. They are opportunistic, using phishing to poke for weak points to use as entry points. Phishing, the most common tool, involves collecting sensitive information like login credentials and credit card information through legitimate-looking but fraudulent websites. Ninety-five percent of phishing attacks led to a breach that was followed by the installation of some sort of malicious software (malware).

Small to mid-sized businesses can take preventive steps to minimize damage. Here are 20 tactics to employ to protect your data. Continue reading »

It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016

Ruth Binger

By Ruth Binger



Changes are coming soon to overtime exemption rules. Issued in May 2016 by the United States Department of Labor (DOL), the updated final overtime rule (Final Rule) will be effective December 1, 2016.

Under the Fair Labor Standards Act, unless considered “Exempt,” an employee must be paid overtime pay of time and one half of regular hourly rate (150%) for all hours worked over 40 in a seven-day regular workweek. Currently, in order to be exempt, the employee must meet all parts of a three-part test:

  1. Salary level test (currently $455 per week or $23,660 per year),
  2. Salary Basis test (employees must be paid a pre-determined salary that is not subject to reductions based upon quality/quantity of work), and
  3. Duties Test for White Collar Employees. Employees engaged in bona fide executive, administrative, or professional capacities that meet a prescribed “duties test” (including any employee employed in the capacity of academic administrative, or teacher in elementary or secondary schools or in the capacity of an outside sales employee, computer systems analyst, computer programmer, software engineer and other similarly skilled computer engineer (“White Collar Exemptions”).

The Final Rule changes effective in December 2016 are only directed to the Salary Level Test; the remaining two parts remain the same. Those changes are as follows: Continue reading »

Best Practices for Avoiding Misleading Browsewrap and Clickwrap Agreements in Cyberspace

Ruth Binger

By Ruth Binger



Visiting a website and merely viewing its contents can bind you to an internet “Terms and Conditions” or “Terms of Use” (“browsewrap” or “clickwrap”) contract.

Website owners, as technology providers, have a dilemma as they wish to facilitate business in the most efficient way. Maintaining the integrity of their software by controlling the scope of the limited software license they are offering is essential to protecting their copyrighted technology.

Given website owners are offering their services to the world, a pressing concern is a disgruntled website user who sues via a class action in the user’s home state. The issue for the courts is how many dispute resolution pre-existing legal rights a website owner can remove through its browsewrap contract, often called “Terms and Conditions,” if the website user receives little to no notice of its existence or has no knowledge that such a notice refers to a binding contract.

If you look carefully at a website you frequently use, you are likely to see various notices in capital letters in highlighted colors referencing that your use of the website is an automatic agreement to the website policies of privacy and terms and conditions. You may not know that this means you are binding yourself to a contract. If you do click on that bothersome notice link, you will most likely notice a nonnegotiable contract that contains a choice of law, agreement to arbitrate, and/or class action waiver. Given the limited attention span of a website user, most users will not click on the link. This is especially true if the website owner has buried the notice at the very end of the page, made it as inconspicuous as possible, and does not require any action to proceed with using the website. Continue reading »

Effect of 2015 SCOTUS Same-Sex Marriage Decision on Employment Practices

Ruth Binger

By Ruth Binger



The U.S. Supreme Court held in Obergefell v. Hodges that there is a constitutional right to marry and that the 14th Amendment’s Due Process and Equal Protection clauses require states to allow same-sex marriages and to recognize same-sex marriages lawfully performed in other states.

The Obergefell decision is not an employment decision. However, the Equal Protection language in the opinion will require companies to make some changes to their employment practices, training, manuals, forms, beneficiary designations, and other personnel policies going forward.

Obergefell followed the Supreme Court’s decision in United States v. Windsor which held that the federal government’s interpretation of “marriage” and “spouse” must apply to both opposite sex and same-sex unions. Windsor made employee benefits like the Family Medical and Leave Act (“FMLA”), COBRA, and the Employee Retirement Income Security Act (“ERISA”) available to all same-sex spouses of federal employees.

What Does Obergefell Mean To Employers? Continue reading »

Exempt Employees, Overtime, and the Proposed DOL Rule for 2016

Ruth Binger

By Ruth Binger



The labor landscape has changed and it will continue to change. The average worker has become increasingly responsible for the more traditional aspects of the employment relationship including health insurance, pension, and job security. There also has been a substantial increase in the numbers of part-time workers, workers/employees classified as exempt from overtime premium pay, and workers misclassified as independent contractors. Commentary and theory abounds as to the reason for the loss of full-time jobs, much less middle class jobs, including outsourcing, computers/software, Affordable Care Act, robots, automation, high taxes, globalization, etc.

Suffice it to say, a legal backlash is building against this new terrain. Proposed restrictive legislation, administrative rule-making, and recent court cases show evidence of a concerted attempt to re-create or retrieve the job security and wages and benefits of days gone by.

Most recently, the U.S. Department of Labor (“DOL”), in a long-awaited announcement on June 30, 2015, proposed a new rule that will decrease the ability of companies to classify their employees as exempt from premium overtime wages under the Fair Labor Standards Act (“FLSA”).

Backdrop – Increase in Part-time Workers

This legal backlash is due, in part, to other recent and dramatic changes in the number of part-time workers:

  • Since 2007, the number of “involuntary” part-time workers has doubled.
  • Employers are increasingly using software tools such as the use of just-in-time scheduling software. Estimates are that 17 percent of the work force is now employed by companies that use just-in-time scheduling software. Employees accordingly work fluctuating work weeks with uncertain schedules.
  • Another contributing factor is business practices, such as the use of “call in shifts” where the employer does not confirm need for services until two hours before start time.

In response, a host of bills are being introduced in many states and municipalities to legislate predictable scheduling.

Backdrop – Misclassification

Likewise, misclassification of workers has also increased. Companies are attempting to shift work from employees to independent contractors, especially in the construction, transportation, and cab industries using a variety of strategies. Continue reading »

Protecting Your Intellectual Property in a Wild World

Ruth Binger

By Ruth Binger



Your company is an “A” player and it has done everything right in the U.S. in protecting its intellectual property (“IP”). You have not just relied upon a “smile.” You’ve invented a unique product called Superstar® widget and it is not yet offered by your competitors. Vast amount of resources have been poured into the development of the Superstar widget. Prior to introducing the Superstar widget, you used due diligence and used the IP Awareness Assessment Tool on the U.S. Patent and Trademark Office website to identify what IP you have, if it has value, and if it can be protected under U.S. law.

Upon identifying your IP, the company retained capable attorneys who were successful in obtaining U.S. trademark registrations on the corporate name, non-functional design, and logo so customers could more easily identify the Superstar widget and its association with the company. Superstar widget packaging correctly evidences all registered trademarks.

You made a wise expenditure on patents and the company has received patents on the Superstar widget process. Further, copyright registrations with the U.S. Copyright Office have been obtained on your website, web video, and associated software and you are giving notice to the world of your ownership by using the appropriate symbol of “©2012 Company.” Continue reading »

Unemployment Insurance in Missouri: Should Employers Respond to Claim Notices?

Ruth Binger

By Ruth Binger



New regulations require Missouri employers to respond timely to information requests regarding unemployment insurance compensation. The federal Trade Adjustment Assistance Extension Act (“TAAEA” or the “Act”) of 2011 requires, among other things, that states increase employers’ duties regarding unemployment compensation claims. Specifically, the Act provides that states must require employers to respond timely and adequately to Claim Notices, information requests from state agencies relating to unemployment benefit compensation claims. It also requires states to charge the unemployment accounts of employers that repeatedly fail to respond to Claim Notices for unemployment benefits paid to ineligible former employees.

In Missouri, an employee that satisfies all the unemployment insurance benefit eligibility requirements may still be disqualified from receiving benefits for voluntarily quitting without good cause or for being discharged for work misconduct. Once a terminated employee files a claim for unemployment benefits, the Missouri Division of Employment Security (“DES”) mails the former employer a Claim Notice, which requires a response within 10 days. The Claim Notice permits the employer to protest an unemployment benefits claim because the former employee quit voluntarily or was discharged for misconduct. If the claim is not in dispute, the employer must still respond to acknowledge the claim.

Some employers routinely fail to respond to Claim Notices. They may systematically choose not to respond to Claim Notices to avoid becoming involved in a former employee’s benefits appeal. Continue reading »

Considerations for Buyer Enforcement of Non-competes in the Purchase of a Business

Ruth Binger

By Ruth Binger



You are a business owner whose company is buying the assets of a Missouri business with locations in both Missouri and Illinois.  Your company intends to hire the seller’s employees. It is your understanding that those employees have signed restrictive covenants/non-competes with the seller (“Seller Agreements”).  You have instructed your attorney to advise you on how to protect your company against the seller’s current highly trained employees walking out the door with the customer relationships, trade secrets, and confidential information you are purchasing.  For administrative purposes, to the extent possible, you would like to use one strategy with both the Missouri and Illinois employees.

Here’s a look at some of the complexities of personal service contracts and non-competes you will want to consider.

Restrictive Covenants and Non-compete Agreements

The phrases “restrictive covenants” and “non-compete agreements” are used interchangeably by the public.  More confusingly, the term “non-compete” is often used to describe three different types of covenants or promises: time and space clause, non-solicitation clause and anti-raiding clause.

The most restrictive non-competition covenant is a promise by the employee not to engage in the same type of business for a stated time in the same geographical market as the employer (“time and space clause”).

More common is a non-solicitation clause, where the employee is allowed to engage in the same type of business in the same geographical area but is prohibited from soliciting the employer’s customers for a stated period of time. Continue reading »