Articles Posted in Employment Law

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Our Chicago non-compete agreement attorneys have defended high level executives in covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.

DiTommaso Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Oak Lawn, Arlington Heights, Oak Brook and Chicago have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results. We have successfully represented a number of doctors in non-compete, partnership and other business disputes.  We understand the complexities of physician partnership and non-compete agreements.

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The federal Fair Labor Standards Act (FLSA) is pretty clear on the definition of overtime and what employers are required to provide for their workers who spend more than eight hours a day or forty hours a week working. All hourly, nonexempt employees are entitled to one and one-half times their normal hourly rate for all overtime worked.

But according to a recent wage and hour class action lawsuit against Bed Bath & Beyond (BBB), the retail chain allegedly miscalculated the overtime wages earned by its managers and customer service representatives in several of its New Jersey locations. In doing so, BBB allegedly violated both the FLSA and New Jersey Wage and Hour Law.

The named plaintiffs were each paid an annual salary ranging from $63,000 to $70,000. Rather than figure an hourly rate based on their annual salary, BBB allegedly took its employee’s weekly base salary, divided it by the number of hours the employee worked that week, divided the solution in half, then multiplied that number by the number of hours the employee spent working after 40 that particular week. In addition to allegations that the formula violated the FLSA, the wage and hour complaint further alleges that it resulted in the class members receiving less than minimum wage for all the hours they spent working.

Certain employees can be held exempt from the FLSA’s overtime requirement, but only if they are paid a salary of at least $23,600 and meet very specific conditions. These qualifications include providing administrative assistance directly to an executive, spending more than half their time at work managing other employees (including weighing in on the hiring and firing of employees), or exercising a particular set of skills or level of education in the course of performing their jobs. Any employee who does not meet all the necessary requirements for one of the categories of overtime exemption is entitled to the premium overtime compensation for all the time they spend working after eight hours a day or forty hours a week. Continue reading

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Selling franchise rights is tricky. On the one hand, it’s an opportunity for both parties to expand and grow their businesses in a mutually beneficial way. On the other hand, because they’re both operating under the same brand, they both bear some responsibility for the way the business under the franchise is run. This is why franchisors include training in their franchise agreements: to make sure the franchisee runs the business in ways that are consistent with the brand.

After a recent decision by a California federal judge, companies may want to include education on employment laws and regulations in the training they provide for their franchisees.

The lawsuit involved a class of employees who worked at five different McDonald’s locations in the San Francisco Bay Area. The plaintiffs allege they were denied the proper compensation when they worked overtime, the wages they did receive did not include all the hours they spent working, and they were not compensated for the time and money they spent on maintaining the uniforms they were required to wear to work. They also alleged they were denied meal and rest breaks, both of which are required by California labor law, but the judge dismissed those charges.

The McDonald’s locations in question were owned and operated by The Edward J. Smith and Valerie S. Smith Family Limited Partnership and that company settled with the class of plaintiffs for $700,000. Continue reading

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The District of Columbia federal appeals court ruled that DirecTV Inc. committed an unfair labor practice when it had contractor technicians fired for complaining about a pay dispute with the company on a TV news program. (DirecTV Inc. v. Nat’l Labor Relations Board, No. 11-1273 (D.C. Cir. 2016)).

DirecTV contracts with MasTec to install satellite television receivers in customers’ homes. The MasTec employees, based in Orlando, Florida, claimed they were pressured to convince customers to connect satellite service through a phone line in order to track viewing habits and increase pay-per-view business. The workers claimed management told them to do “whatever it took” to get customers to agree, including lying and installing phone lines without their knowledge. In 2006, under financial pressure from DirecTV, MasTec began docking the pay of technicians who didn’t meet quotas for phone line hookups.

After technicians complained to management, MasTec and DirecTV refused to change their policies. When a protest outside MasTec also failed to settle the matter, a group of MasTec technicians contacted a local TV news station, which interviewed them wearing their DirecTV uniforms. The report addressed the technicians’ grievances concerning the pay policy and their belief that they were being told to lie to customers; it also suggested that these phone connections could cost consumers more money.

DirecTV told MasTec it did not want the technicians in the broadcast representing DirecTV in customers’ homes, and MasTec then fired nearly all the technicians who participated.

Under the National Labor Relations Board’s interpretation of the National Labor Relations Act, “Employee communications to third parties in an effort to obtain their support are protected where (i) the communication indicate[s] it is related to an ongoing dispute and (ii) it is not so disloyal, reckless or maliciously untrue as to lose the Act’s protection.” Continue reading

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It’s often more cost effective for companies to hire independent contractors to perform certain jobs, rather than hiring employees. Even for part-time employees, companies are responsible for paying things like employment taxes and Social Security, none of which they have to worry about with independent contractors. There are benefits to working as a true independent contractor, but because independent contractors are not protected by the federal Fair Labor Standards Act (FLSA), workers have to meet very specific requirements in order to legally be considered independent contractors.

Under the FLSA, workers classified as independent contractors must be able to negotiate their own rates, have control over their own schedule, the environment they work in, and have a certain level of discretion as to how they perform their duties, among other things. Any and all workers who do not meet all of the necessary qualifications for independent contractors must be classified and compensated as employees, including benefits (such as health insurance) for full-time employees.

Many employers have been illegally classifying drivers as independent contractors and FedEx is just one of several companies to have recently faced multiple class action wage and hour lawsuits from drivers alleging they should have been classified as employees.

Current and former FedEx drivers from approximately 40 different states have been filing wage and hour lawsuits against the giant shipping company for more than ten years now. Many of those lawsuits were consolidated into multidistrict litigation (MDL) and then certified as class actions so that drivers from all across the country could combine their claims against FedEx. Continue reading

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Because stock trading is full of opportunities for traders to take advantage of their positions, the law takes accusations of fraud very seriously, but it works the other way, too. Traders have to work hard to protect their reputations because their livelihood depends on it. As a result, stock traders tend to react quickly if they’re ever accused of insider trading or any other forms of fraud.

According to a recent defamation lawsuit, Allstate allegedly falsely accused four traders of illegally taking advantage of their insider trading knowledge by intentionally timing trades in such a way that would inflate their own bonuses. Daniel Rivera, the managing director of Allstate’s equity division, along with three senior portfolio managers, were the four employees accused and fired as a direct result of those accusations.

In October 2009, Allstate announced the work of its equity division would be outsourced to Goldman Sachs. In December of that same year, it fired Rivera and his three senior portfolio managers (Kensinger, Meacock, and Scheuneman) for allegedly violating Allstate’s code of ethics. Because the four employees were supposedly fired with cause, they were not eligible for severance pay. The timing is certainly suspicious, but if Allstate did this as an to save money and avoid paying four senior employees their severance packages, the plan, if this was the plan, a fact which Allstate surely denies, then the plan backfired. Continue reading

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The federal Fair Labor Standards Act (FLSA) allows employers to pay their workers in a variety of ways, including an hourly wage, an annual salary, by the day, by the job, or on commission. But no matter how employees are paid, the FLSA requires the amount to be no less than the federal minimum wage, which is currently set at $7.25 per hour.

In addition to the minimum wage, the FLSA also defines overtime as any time spent working after eight hours a day or forty hours a week. For all overtime worked, employees are entitled to one and one-half times their normal rate of pay, regardless of the method of their payment. The FLSA does allow for certain types of employees to be held exempt from the overtime requirement, but it is very specific about the qualifications employees need to meet in order to be legally considered overtime exempt.

According to a recent collective action wage and hour lawsuit against Citizens Bank, the financial company allegedly deducted overtime wages from its mortgage loan officers. U.S. District Judge Arthur J. Schwab recently certified the collective action, which means all the eligible employees who worked at Citizens Bank as mortgage loan officers will have the opportunity to opt into the collective action and submit their claims for relief. Those claims will then be used to determine how much the plaintiffs receive if the lawsuit is settled or awarded to the plaintiffs. Continue reading

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When a company sues a former employee for breaching confidentiality and solicitation agreements, it needs more than generalized accusations in order to hold up in court. Bridgeview Bank Group employed Thomas M. as a senior vice president and SBA loan officer from 2013 to 2015. Thomas originally signed a noncompete agreement that prohibited him from engaging in SBA lending for six months after termination, but after he was dismissed by the company, the contract was modified as part of a severance agreement. He was allowed to compete with Bridgeview but had to refrain from soliciting Bridgeview clients or employees for one year, and from making “disparaging” comments against the company. He was also required to maintain the confidentiality of Bridgeview’s information.

More than four months after Thomas’s termination, Bridgeview brought claims against him for breach of contract and fiduciary duty, and tortious interference with business relationships. The company claimed that Thomas had contacted its customers, divulged confidential information, and made disparaging remarks about Bridgeview, alleging that he had interfered with “one or more contractual or prospective contractual relationships.” However, as noted by the First District Appellate Court on appeal, Bridgeview identified no specific customer, confidential piece of information, or disparaging comment in its complaint. Bridgeview also sought a temporary restraining order against Thomas, but provided no more in the way of documentation than e-mail messages Thomas supposedly sent to himself on his last day of work, containing an income statement, various internal passwords, and a list of about 3,000 contacts which reportedly included Bridgeview staff and prospective customers. Continue reading

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An employment agreement that sets out a specific term of employment may not protect an employee from being terminated at any time. The Fifth District Appellate Court in Wessel v. Greer Management Services, Inc., 2016 IL App (5th) 150259-U recently ruled against a plaintiff who brought a breach of contract action against her former employer, holding that the language in the agreement she signed provided for at-will employment despite the inclusion of fixed employment dates.

Christina W. was hired as a compliance manager by Greer Management Services. She and a Greer representative signed an untitled document labeled an “employment summary,” which stated that Christina would serve in the position “for the period of January 1, 2012 to December 31, 2014,” and described the compensation package. However, the final paragraph read: “Greer Management Services reserves the right to change the above provisions at any time. The provisions of the policy manual govern the rights and obligations of the employee. The employee acknowledges that she is an employee at will.” After Greer terminated Christina’s employment in September 2013, midway through the term specified in the signed document, Christina filed a complaint against the company claiming that the document was a contract for employment which was breached by Greer.

The trial court dismissed the complaint, finding that Greer reserved the right to change the provisions of the agreement at any time, including by terminating Christina’s employment before the expiration of the term, and that the “employment summary” was not sufficient to overcome the presumption of employment at-will. Christina then filed an amended complaint again alleging breach of contract and also breach of the implied covenant of good faith and fair dealing, for “terminating her employment without notice, warning, or explanation, contrary to her expectations.” The court against dismissed her complaint, on the grounds there was no valid and enforceable contract for employment and therefore could be no breach. Continue reading