Yesterday, Ryan Miller and I were invited to speak at the Tarrant County Bar Association’s Labor and Employment Section luncheon.  Our topic was the recent changes to Texas noncompete jurisprudence.  A copy of the Power Point presentation we jointly presented can be accessed here.

For my contribution, I presented some thoughts on the practical effect the Marsh USA decision will have for employers and employees that dealing with noncompetes.  Here is a summary of thoughts:

REPRESENTING THE EMPLOYER USING NONCOMPETES

  • Employers should continue to tie noncompetes to promises to provide confidential information and trade secrets to the employees and the employees’ return promises not to disclose that information to third parties.  Trial courts are familiar with this concept and will expect it Marsh USA notwithstanding;
  • Consider linking the noncompete to some financial benefit provided to the employee that is reasonably related (Marsh USA eliminates the "gives rise to" requirement of Light) to encouraging the employee to generate goodwill for the company.  Who knows how far courts will take Marsh USA, but bonuses, salary, for cause termination provisions, favorable parking spaces, fancy job titles, business expense accounts to entertain clients are a few examples of financial benefits that might be reasonably related to encourage employees to create goodwill that come to mind.
  • Resist the urge to make the restrictions broader than necessary.  Courts have a statutory obligation to reform overly broad covenants, but any damages that accrue prior to reformation aren’t recoverable.  Remember, reformation kills damages.
  • Marsh USA isn’t a magic bullet.  Marsh USA doesn’t change the standard to obtain a temporary injunction (and there is where the battle often lies).  Employers still have to show probable right of success on the merits (arguably easier post-Marsh USA) and imminent irreparable harm.

In the next post, I’ll cover my thoughts on what employees who may be subject to a noncompete might consider.

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In a recent case out of the U.S. District Court for the Northern District of Texas, a federal judge entered summary judgment for the City of Fort Worth in an FLSA overtime case filed by four former police officers.   

In Clark v. City of Fort Worth, Texas, four retired City of Fort Worth police officers filed a FLSA putative collective action seeking to represent a class of current and former officers for unpaid overtime they claimed they worked when they provided security services for third-parties leasing City properties (e.g., events at the City owned convention center).  According to the plaintiffs, these off-duty hours providing security for sporting events and concerts on City property (but for non-City events) should have been added to their regular official law enforcement hours with any work over forty hours per week being paid at overtime rates.  The City moved for summary judgment arguing that the special detail exemption excluded those hours worked for the separate employers and that no overtime was due and owing.  There are only six reported cases involving the special detail exemption so this opinion is important if for no other reason than to add to the scant case law on the issue.

The special detail exemption applies to law enforcement and fire fighter employees who voluntarily perform work for separate and independent employers.  Under the exemption, the hours voluntarily worked for the separate and independent employer are excluded from the officer’s hours worked on behalf of the the primary employer for FLSA overtime purposes.  In a well-reasoned opinion, the federal judge presiding over the case, concluded that the City has established its affirmative defense that the hours sued on were exempt under the special detail exemption and entered a judgment in favor of the City. 

You can download a copy of the Court’s opinion here.

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Imagine this, its Friday and you are sitting in your office as Director of Verizon’s newly created Office of Reasonable Accommodation.  An employee, I’ll call him Joe, walks into your office.  Joe tells you he’s recently converted to the Church of the Flying Spaghetti Monster (i.e., he is now a Pastafarian); that Friday’s are his religion’s holiday; and that his religion requires him to wear a spaghetti strainer on his head at all times. He requests, as a reasonable accommodation of his religious beliefs, all Friday’s off from work and to have the photograph on his employee identification badge retaken so that he be shown wearing a colander on his head. What do you do?

Most employment civil rights laws require that employers treat all employees equally without regard to age, sex, color, race, national origin etc.  The ADA and Title VII’s protection of employee’s religious beliefs, however, may require employers to treat employees differently (i.e., reasonable accommodation).  Here, Joe’s request to accommodate his beliefs (which appear sincerely held) can only be denied if accommodating the belief would cause undue hardship to the employer.  Undue hardship under Title VII is different than under the ADA.  Under Title VII, a proposed religious accommodation is often an undue hardship where it requires the employer to incur more than de minimus expense; violates a CBA, law or valid seniority system; ignores safety risks or requires other employees to work longer or harder. 

Applying these rules to Joe’s request, unless you can establish that for security reasons employee photographs on access badges must be taken without headwear, you should probably tell Joe to get his colander while you get out the Kodak.  With respect to the request for all Fridays off, unless Joe’s request would violate a CBA provision regarding bidding for schedules or would otherwise make Joe’s co-workers work longer or harder, Joe should probably be allowed to take his Fridays off.

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Church of Flying Spaghetti Monster Resources Facebook and Wikipedia.

The ABA Journal is compiling its annual list of the 100 best legal blogs and is seeking nominations on the blogs to include.  Inclusion on this list (which is not limited to labor and employment law blogs but includes all legal blogs) is prestigious and is something that I, and others that blog regularly, aspire to achieve.

This post is a shameless request (read "beg") that, if you like the Texas Employment Law Update, you nominate this blog for the Blawg 100 list.  Nominating a blog is easy.  You can access the on-line ABA Journal nomination form to nominate the Texas Employment Law Update (or other worthy blogs) here.

Nominations must be submitted by September 9, 2011.  Thank you for reading the Texas Employment Law Update.

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