U.S. Supreme Court Gives Increased Protection to Government Employees

The Supreme Court recently ruled unanimously that government employees who testify about public corruption are protected by the First Amendment. The case, Lane v. Franks, [1]centered on a public employee, Lane, who worked at an Alabama community college where he led the school’s program for at-risk youth.

While working for the community college, Lane discovered a state representative was on the program’s payroll, despite doing no work for the program. Lane terminated the representative’s employment, and subsequently, the representative was indicted by federal authorities on corruption-related charges. Lane testified, under subpoena, at the representative’s trial in 2008. In 2009, Lane was fired from the college. Lane sued the community college president individually and in his official capacity alleging that the official violated his First Amendment protections.

The college president argued that Lane’s sworn testimony was not protected by the First Amendment because it was based on information that he gathered from his role as a state employee, not as a private citizen. The lower courts agreed with the college president, determining that Lane acted in his official capacity when firing the state representative and had acted in the same capacity when testifying at her trial. The Supreme Court disagreed and stated that Lane testified “as a citizen on a matter of public concern.” According to Justice Sotomayor, “Truthful testimony under oath by a public employee outside the scope of his ordinary job duties is speech as a citizen for First Amendment purposes. That is so even when the testimony relates to his public employment or concerns information learned during that employment.”

The ruling means that government employees should feel more protected when stepping forward with whistleblower-type information. Both public and private employers should exercise caution when taking negative actions against an employee who has complained of or filed a charge of discrimination, or participated in some kind of investigation or proceeding, as the action could be considered retaliatory. If you are an employer and would like more information about lawful termination practices, contact a McBrayer employment law attorney today.

 

[1] No. 13-483 (2014).

Luke Wingfield

 

 

 

 

 

 Luke A. Wingfield is an associate with McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mmlk.com or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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NLRB Judge Adds to Uncertainty Regarding Work Rules and Social Media Policies

On June 4, 2014, an Administrative Law Judge (ALJ) with the National Labor Relations Board (NLRB) held in Professional Electrical Contractors of Connecticut, Case No. 34-CA-071532, that certain work rules and social media policies designed to protect customer privacy constituted unfair labor practices. The rules and policies at issue applied to employees who worked on customers’ premises.

ALJ Raymond Green ordered the company to cease and desist from enforcing any work rule or policy that:

  • Prohibits employees from disclosing the location and telephone number of employee customer assignments, as it could inhibit the ability of a labor union to meet and communicate with employees;
  • Prohibits employees from engaging in boisterous or disruptive activity in the workplace, based on prior Board decisions, because the rule is “sufficiently imprecise” and could encompass any disagreement or conflict among workers protected by Section 7 of the National Labor Relations Act (NLRA);
  • Prohibits employees from initiating or distributing chain letters, sending communications, posting information, or using personal computers in any manner that may adversely affect company business interests or reputation, because the rule overreached by including personal computers; or
  • Prohibits employees from photographing, taping, or recording any person, document, conversation, communication, or activity that in any way involves the company, its associates, customers (except to the extent that the customer disallows photographing or filing on its premises), or other individual with whom the company intends to do business. The ALJ opined that, on balance, the employees’ rights generally outweighed the employer’s well-intended interest in customer privacy.

The ALJ upheld the company’s policy prohibiting employees from disclosing customer information to other customers, third parties, or members of the employee’s family. He reasoned that such a rule would not unreasonably deter employees from talking to one another or the union about terms and conditions of employment. Some aspects of the ruling conflict with other ALJ decisions, adding to the uncertainty about which work rules or social media policies the NLRB and courts will ultimately determine to be impermissible. As ALJ Green observed, “[A] legitimate conflict of principles … will require Board and Appellate Court clarification.” The company is expected to appeal the decision to the full Board and, if necessary, to the appellate court.

This case is a perfect example of the NLRB General Counsel’s continued enforcement efforts to focus on work rules and policies that conceivably limit employee rights to discuss wages, as well as other terms and conditions of employment. Unfortunately, the ruling could affect employers who are targets of union organizing campaigns, not just those who already have collective bargaining agreements in place. The bottom line is that this ruling is another reason why all employers should regularly update and review their handbooks and policies with their employment law attorneys.

Kembra Sexton Taylor

 

 

 

 

 

Kembra Sexton Taylor, a partner located in the firm’s Frankfort office, practices in the areas of labor and employment, personnel, administrative, regulatory, appellate, and insurance defense law. She has extensive experience in representing clients regarding wage and hour, OSHA, state personnel, and other regulatory matters. She can be reached at taylor@mmlklaw.com or (502) 223-1200.

This article is intended as a summary of federal and state law and does not constitute legal advice.

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U.S. DOL Issues Proposed Minimum Wage Regulations for Federal Contractors

On June 17, 2014, the U.S. Department of Labor (DOL) released its proposed regulations relating to Executive Order 13658, which established a minimum wage for federal contractors. The Executive Order – signed by President Obama on February 12, 2014 – raises the minimum wage on covered federal contracts from $7.25 to $10.10 per hour, beginning January 1, 2015. Thereafter, the Secretary of Labor will be required to set the amount of increase to take effect on January 1 of each year, indexed to inflation. The Notice of Proposed Rulemaking (NPRM) establishes procedures for implementing and enforcing the Executive Order.

The Executive Order applies to contracts for construction covered by the Davis-Bacon Act that exceed $2,000; contracts for services covered by the Service Contract Act that exceed $2,500; concessions contracts (for food, lodging, fuel, souvenirs, newspaper stands, or recreational equipment on federal property); and contracts to provide services, such as child care or dry cleaning, in federal buildings. In procurement contracts where workers’ wages are governed by the Fair Labor Standards Act (FLSA), the Executive Order applies only to contracts that exceed $3,000.

The NPRM defines key terms used in the Executive Order, including “contracts,” “contract-like instruments,” “concessions contracts,” and “workers.” A “contract” or “contract-like instrument” is defined as an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. A “concession contract” is a contract under which the federal government grants a right to use federal property, including land or facilities, for furnishing services. The proposed regulations use “worker” in a broad sense and covers those who would not otherwise be “service employees” under the SCA or “laborers” under the DBA.

Further, the NPRM establishes standards for contractors to apply in determining whether their employees are covered by the Executive Order. The regulations also contain recordkeeping requirements and directions for finding the required rate of pay for all workers, including tipped workers and workers with disabilities.

DOL plans to adopt existing mechanisms used for enforcing prevailing wage laws to enforce the provisions of the Executive Order. Under the proposal, any contractor who DOL determines has failed to pay the proper minimum wage will be notified and asked to remedy the violation. Additionally, the contracting agency may be directed to withhold payments under the contract. If a notice of violation is issued, the contractor may appeal to an administrative law judge.

This summary only scratches the surface of the propose rule. It is important for any employer who might be affected by the Executive Order to review the NPRM carefully. DOL will accept comments on the proposed rule until July 17, 2014, at http://www.regulations.gov. The regulation identification number is 1235-AA10. DOL expects to issue the final rule by October 1. If you have questions about whether this will apply to you, contact your employment law attorney.

Kembra Sexton Taylor

 

 

 

 

Kembra Sexton Taylor, a partner located in the firm’s Frankfort office, practices in the areas of labor and employment, personnel, administrative, regulatory, appellate, and insurance defense law. She has extensive experience in representing clients regarding wage and hour, OSHA, state personnel, and other regulatory matters. She can be reached at taylor@mmlklaw.com or (502) 223-1200.

This article is intended as a summary of federal and state law and does not constitute legal advice.

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An Important New Decision Affects Non-Compete Agreements in Kentucky

The Kentucky Supreme Court recently reversed the Kentucky Court of Appeals’ holding in Creech, Inc. v. Brown, and declared that continued employment, standing alone, is no longer sufficient consideration to justify or support enforcement of a non-competition agreement. In the course of reaching its decision, the Court clarified prior case law dealing with the issue of whether non-competition agreements may be executed in exchange for merely retaining one’s job. While the case has an intricate and complex set of facts, this post focuses on the consideration requirement only.

The case arose out of a dispute between Charles T. Creech, Inc., Standlee Hay Company, Inc., and Donald Brown. Both companies provided hay and straw to horse farms in Kentucky and other states. Donald Brown was hired by Creech as an employee in 1990. Sixteen years later, in 2006, Creech approached Brown and asked that he sign a document entitled “Conflict of Interest” (herein “the Agreement”) which, in relevant part, would prohibit Brown from “work[ing] for any other company that directly or indirectly competes with the company for 3 years after leaving Creech, Inc. without the companies[sic] consent.” Brown signed the Agreement but, shortly after signing, Brown was transferred from his job as a salesperson to a dispatcher position. The transfer resulted in the same salary but decreased responsibilities.

In 2008, Brown resigned from Creech to take a job with Standlee. After hearing rumors that Brown had contacted Creech’s customers, employees, and suppliers while at his new job, Creech filed suit against Brown and Standlee alleging, among other things, breach of contract. Creech also simultaneously sought injunctive relief. In response, Brown argued, among other things, that he had received no consideration for signing the Agreement.

The trial court entered a temporary injunction against Brown and Standlee, finding that Brown’s continued employment by Creech constituted consideration for the Agreement. Brown immediately appealed the trial court’s decision to enter the injunction. The trial court was subsequently overturned on appeal. On remand, the trial court awarded summary judgment to Brown and Standlee. Creech appealed the order and the case went to the Court of Appeals for the second time.

At the Court of Appeals, the trial court’s summary judgment was reversed. The Court proposed a six-factor test to be applied by the trial court in determining whether the non-competition portion of the Agreement was enforceable. The Court also held, as a matter of law, that Brown’s continued employment with Creech constitutes sufficient consideration to support the Agreement. All parties sought discretionary review from the Kentucky Supreme Court.

On review, the Court declared the Agreement unenforceable and reinstated the trial court’s summary judgment in favor of Brown and Standlee. In their Opinion, the Court distinguished the two cases Creech primarily relied upon in his argument, Higdon Food Service, Inc. v. Walker and Central Adjustment Bureau Inc. v. Ingram Associates, Inc.[1] According to the Court, the common thread running through Higdon and Central Adjustment Bureau, but not in the case at hand, was the fact that after the non-competition provision was signed, whether as a larger employment contract or stand-alone document, the employment relationship between the parties changed. In Higdon, the employee became more than an at-will employee. In Central Adjustment Bureau, the employees received specialized training, promotions, and increased wages. Brown, in contrast, remained an at-will employee with no promotion, no increase in wages, or specialized training. In fact, he actually received decreased responsibilities, which could be considered a demotion.

From a best practice standpoint, employers must now be sure that non-compete agreements, if presented after employment, are coupled with adequate consideration. What constitutes adequate consideration will vary depending upon the factual circumstances applicable to the employee and the industry he/she is employed in. Analysis of the prevailing factual scenario is critical. We highly recommend consultation with legal counsel before asking your employees to execute a non-competition covenant.

[1] 641 S.W.2d 750 (Ky. 1982); 622 SW.2d 681 (Ky. App. 1981).

 

J. Woodall

 

 

 

 

Jon A. Woodall, a member of the firm, joined the McBrayer team in 1994. Mr. Woodall has a broad range of legal experience gained through 18 years of practice throughout the Commonwealth of Kentucky and the various states where his clients conduct business. Mr. Woodall’s practice is concentrated in the areas of construction law and commercial litigation. He counsels his clients on issues relating to contract formation and performance as well as the litigation of complex construction and commercial disputes (including water intrusion/mold claims) at the state, federal, and administrative levels. He can be reached at jwoodall@mmlk.com or (859) 231-8780, ext. 260.

 

B. Yates

 

 

 

 

Brendan R. Yates is an associate in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Brendan is a member of the firm’s Litigation Department, where he focuses his practice on construction and real estate litigation, workers’ compensation defense litigation, insurance defense and commercial litigation. He has successfully defended his clients in state and federal courts, the Kentucky Court of Appeals, the Kentucky Supreme Court, and in administrative agency proceedings in Kentucky. He can be reached at byates@mmlk.com or (859) 231-8780, ext. 208.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

 

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NLRB Decision Limits Employer’s Off-Duty Policy, Part II

Earlier this week, we provided information relative to the NLRB’s decision in Piedmont Gardens, 360 NLRB No. 100 (2014).The issue in the case was the employer’s ability to regulate off-duty employee access to the property, a nursing home. The company handbook contained a provision that generally prohibited off-duty access, unless such access was previously authorized by a supervisor. The NLRB found the “unless previously authorized” caveat to be unlawful because it gave supervisors an unlimited scope in determining when and why employees could access the building.

What is especially interesting about this case is that Piedmont Gardens argued its access policy was lawful because, although the company handbook may have used broad “unless previously authorized” language, in practice, employees were only permitted to enter the nursing home while off-duty for three specific reasons: to pick up a paycheck, attend a scheduled meeting with human resource representatives, or to arrive early for the night shift. The NLRB found the argument unconvincing because the employer could not show that those were the only circumstances in which employees were allowed to enter the building. The Board declined to rule whether the nursing home’s policy would be unlawful if it clearly stated the three reasons for which employees would be granted off-duty access.

The Piedmont Gardens case highlights an important reminder for employers: a handbook should reflect the realities of real-world procedures. While Piedmont Gardens had established specific circumstances in which employees could access the facility, the handbook language did not outline these and instead relied on an overly-broad provision that was in violation of the National Labor Relations Act. Too often, what is stated in a company handbook does not reflect the employer’s day-to-day practices. In litigation, both written policies and employer/employee testimony will be used. Employers must ensure their policies are lawful and, further, that they are implanted accordingly.

Off-duty access policies should be broad enough to cover the employer’s concerns, but not so broad that they restrict employees’ Section 7 rights. In addition, all policies must be disseminated, applied, and enforced even-handedly. If you are an employer and need help crafting an off-duty policy, contact a labor and employment law attorney today.

B. Koch

 

 

 

 

 

Brittany Blackburn Koch, Esq., is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. She may be reached atbkoch@mmlk.com or at (859) 231-8780, ext. 300.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

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NLRB Decision Limits Employer’s Off-Duty Policy

The National Labor Relations Board (NLRB) recently issued a decision in Piedmont Gardens, 260 NLRB NO. 100 (2014) regarding the legality of an employer’s off-duty access policy. Piedmont Gardens is a nursing home. Many employers, especially those in health care or other highly-regulated industries, have policies that prohibit against employees lingering around the job site when not working. Off-duty employees can not only be a disruption to the business and create security risks, but can also increase an employer’s liability. After the newest NLRB decision on the issue, however, employers should review their policies to ensure that they do not run afoul of federal law.

The NLRB first dealt with off-duty access in 1976, in the case of Tri-County Medical Center, 222 NLRB 1089 (1976). It was decided then that policies limiting after-hours access to the workplace are lawful, provided they:

  1. Limit access solely to the interior of the facility and working areas (parking lots or other areas that are outside the building cannot be restricted);
  2.  Are clearly disseminated to all employees; and,
  3.  Apply to off-duty employees seeking access to the facility for any purpose, and not just to those engaging in union activities.

It is critical to note that Section 7 of the National Labor Relations Act (NLRA) allows all employees (even those in non-unionized workplaces) to engage in concerted activity for mutual aid and protection and to form, join, assist  organize or communicate about matters relating to labor unions or working conditions. Any potential interference with Section 7 in a workplace can lead to an unfair labor practice under NLRA Section 8(a)(1).

Citing to the precedent established in Tri-County Medical Center, the NLRB found Piedmont Gardens’ policy to be unlawful. Although the employee handbook generally prohibited employees from remaining on the premises after their shifts ended (in accord with the rules established in Tri-County Medical Center), it contained the exception, “unless previously authorized by a supervisor.” This exception, according to the NLRB, gave supervisors unlimited discretion to determine “when and why employees may access the facility.” Such unfettered discretion is contradictory to a general prohibition, in the eyes of the NLRB.

For more on this case and some best practice pointers related to off-duty access, check back on Wednesday.

B. Koch

 

 

 

 

Brittany Blackburn Koch, Esq., is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. She may be reached atbkoch@mmlk.com or at (859) 231-8780, ext. 300.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

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JOIN US FOR A FREE EMPLOYMENT LAW SEMINAR!

Lessons in Workplace Liability Seminar

FREE EVENT HOSTED BY MCBRAYER & LOUISVILLE BUSINESS FIRST

DATE: June 10, 2014

TIME: 7:30 a.m. – 8:00 a.m. -breakfast

8:00 a.m – 9:30 a.m. -seminar

WHERE: University of Louisville Shelby Campus

There are so many acronyms today that employers must be familiar with, but they all can mean the same thing: Discrimination Claims!

  • GINA
  • ADAAA
  • EDNA
  • LGBT Rights

Join McBrayer employment law attorneys Amy D. Cubbage and Cynthia L. Effinger as they explain how to protect your profits and learn the best practices for your company. We hope to see you there!

Amy Cubbage

 

 

 

 

Amy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.

Cindy Effinger

 

 

 

 

Cynthia L. Effinger is an Associate of  McBrayer, McGinnis, Leslie & Kirkland, PLLC. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. She also has experience with First Amendment litigation, securities litigation and complex litigation. Ms. Effinger can be reached at ceffinger@mmlk.com or at (502) 327-5400, ext. 316.

This article is intended as a summary of state and federal law and does not constitute legal advice.

 

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