Non-Compete Agreements Back in the News

Non-compete agreements have been in the news lately. The New York Times wrote an article about sandwich makers at Jimmy John’s sandwich shop being made to sign a non-compete agreement in order to work at Jimmy John’s. The agreement requires an individual who signed the agreement to not work at any shop that receives more than 10% of its income from sandwiches.

More and more employers are requiring their employees to sign on-compete agreements. As Jimmy John’s shows, non-compete agreements are trickling down from high level management where they are common parts of employment contracts to low level workers.

Traditionally non-compete agreements were entered into as part of a negotiation between high-skill, upper-level employees and prospective employers. The agreements helped to safeguard a company’s proprietary knowledge, procedures, or connections.

The new non-competes are part of a take-it-or-leave it agreement and there is no negotiation. Jimmy John’s employees who signed the agreement did not receive anything in exchange for signing a non-compete other than a job.

As the article notes, it is not clear if Jimmy John’s has ever tried to enforce the agreement in court. It is also not clear if the agreement is even enforceable.

Non-compete agreements are typically governed by state law. This means that in each state the enforceability of a non-compete is different. In some states, like California, non-competes are hard to enforce. In recent years some states, Georgia for example, has made it so non-compete agreements are more likely to be enforceable.

The traditional way to analyze whether a non-compete is enforceable is to look at the geographic scope of the agreement, how long it is to be enforced, how connected the non-compete is to the work that was done, and to whom it is meant to be enforced against.

Geographic scope concerns how far the non-compete agreement is supposed to extend. The wider the geographic scope the less likely the agreement is enforceable. If the agreement was supposed to prevent the Jimmy John’s employee, for example, from working in any sandwich shop in the world, then the agreement would probably be unenforceable. If the agreement prevented the employee from working at another sandwich shop within one mile of the shop where they worked then that might be considered more reasonable.

Length of time concerns for how long the agreement is to be enforceable. Some states have period of time under which the agreement is presumptively enforceable. In Georgia the law says non-compete agreements that are to last 2 years or less are presumptively enforceable. In other states courts will look at the totality of the agreement to see if the length of time for the non-compete is reasonable.

Another factor to examine when looking at whether a non-compete agreement is enforceable is to look at how connected the employee is to the information that needs protection. For example, a non-compete may be unenforceable against janitor at a software company while the same agreement may be enforceable against a software engineer. The janitor would not know any of the company’s customers, procedures, secrets etc. so there is no reason to prevent the janitor from working at another software company. The engineer may have had access to important information so a court would be more likely to enforce an otherwise reasonable non-compete agreement against the engineer.

Finally, to whom the agreement will be enforced against looks at the business ex-employee has moved to and whether there is a connection between the previous company and the employee’s new company. To even stand a chance of being considered enforceable a non-compete must be limited to businesses that may have a connection with the business trying to enforce the non-compete. Looking at the Jimmy John’s example, the agreement prevents employees from working at food stores that make at least 10% of their money from sandwiches. If the agreement said “all stores” or even “all food stores” it would probably be too broad to be enforceable. A non-compete has to limit the agreement to other businesses who are in the same industry and doing a very similar thing as the company looking to enforce the non-compete. It might even be that “stores that make at least 10% of their money from sandwiches” is too broad because Jimmy John’s almost exclusively makes sandwiches.

Non-competes are becoming more common and are being given to employees further down the org chart. Employers are also becoming more willing to got to court to enforce a non-compete. It is clear that employers are using non-competes as a way to control their workers and keep down wages. As an at-will employee your only leverage is saying you will leave. Non-compete agreements make it much harder for employees to follow through on that threat. Leaving a company for a new position somewhere else is also one of the only ways to get a raise nowadays. By making it hard to leave it means that employers can keep their employees, not give them raises, and not be worried about them leaving.

Research also suggest that non-competes reduces innovation and entrepreneurship. Studies comparing California, where non-competes are enforceable, with Massachusetts where non-competes are enforceable, show that non-competes stifle innovation and non-enforcement helped create Silicon Valley. Because of this there have been a number of attempts to change MA’s non-compete environment.

Non-compete agreements are a boon to individual businesses while hurting employees and the economy as a whole. There needs to be a move to make non-competes less enforceable. Unfortunately big business interests in states like Georgia are more interested in their own well-being and profits rather than the economy as a whole.

If you are in Georgia and have been offered a non-compete, or a company is trying to enforce a non-compete you previously signed, contact attorney Ben Kandy.


I just got fired! What do I do?

I Just got fired! What do I do?

Getting fired is never fun. You might feel angry, embarrassed, or upset. If you get fired, what are some things you should do to help make sure your time spent unemployed is as quick and painless as possible?

If you are getting a severance package, make sure you are getting everything to which you are entitled.

Severance packages can help you get through a period of unemployment. Usually employers will offer a certain number of weeks worth of salary plus other benefits. Some states require that an employee receive unused vacation or sick leave time in cash. If this is the law in your state, check to make sure you are getting your accrued vacation or sick leave.

In order to receive a severance, most employers ask the recipient to sign away their right to sue the company for various things and also may ask the recipient to sign a non-compete or non-solicitation agreement. It is important to talk to a lawyer in your jurisdiction before signing such an agreement. You want to make sure the agreement is legal and to make sure you are not signing away your right to sue on a legitimate claim.

If you are fired, sign up for any benefits that might be available.

There are a number of benefits available to people who have been fired. One of the most obvious is unemployment benefits. Regardless of the reason for you being fired, it is still a good idea to apply for benefits. The worst that can happen is that you are denied benefits. Of course, you should never, ever lie on a claim form. To find out more about unemployment benefits in your state contact your state department of labor.

Other non employment related benefits are available to help people if they loose their job. At the federal level there are a number of programs. One important program is COBRA. COBRA allows an individual who lost their job to retain their group health insurance plan by paying up to 102% of the premium. COBRA is very expensive and may be less necessary now the ACA offers affordable coverage and insurers can’t discriminate based on preexisting conditions.

Finally, if the situation is bad, there may be more basic welfare programs at the state and federal level. These might include food stamps, WIC, Temporary Aid to Needy Families, Medicaid, and other programs. Many of these programs are funded partially by the federal government but administered by the states. The state agency responsible is usually called the department of human services or health and human services or something similar. Get in contact with the state agency in charge of the programs to find out what programs you may be eligible for.

Find ways to save money while you are unemployed

When you find yourself unemployed after getting fired, it’s very important to pare back a bit. This can help prevent you from needing to drain your savings. There are a lot of little things you can do to save money. Some are obvious and some are a little less so. Here are a few suggestions:

  • No cable tv. Get a digital antenna for free over-the-air tv
  • Stop eating out and become a coupon champion.
  • Try cut back on non-essential goods and services like haircuts, cigarettes, pedicures etc.

Update your skills.

Unemployment can provide an opportunity for you to update and upgrade your skills. This can help you find a job faster, get a better job in you field, or break into a new career.  Federal and state governments offer programs that can help you find a training or education program and even subsidize your education. Careeronestop is the federal government’s portal for job career education and training.

Don’t get too discouraged!

Keeping a positive attitude is essential. Try to take your newly found free time and use it in a constructive way. Learn a new skill, start a small business that doesn’t require much start up capital like selling stuff on Ebay, enjoy time with your family. All this is much easier said than done. Keeping a positive attitude gets harder the longer you are unemployed. Hopefully your time spent unemployed will be brief, relatively painless, and lead you to a better place with a great new job. Good Luck!



The impact of Unemployment Benefits on Other Sectors of the Economy

The New York Times ran an article that sheds further light on how unemployment benefits impact the real estate market. I briefly touched on this point in a larger article about how cutting unemployment benefits did not help the unemployed and in fact hurt the economy.

From July 2008 through December 2012, $250 billion in federally funded unemployment benefits helped homeowners avoid an estimated 1.4 million foreclosures. This shows how important unemployment benefits are to the entire economy. In fact the number of foreclosures prevented by extended unemployment benefits eclipses the 800,000 foreclosures that were prevented as of 2013 by the government’s main anti-foreclosure program, Home Affordable Modification Program, or HAMP.

The value of preventing the 1.4 million foreclosures was valued in the study at $46 billion that would have been otherwise lost on government-backed mortgages and an additional $70 billion in deadweight losses from foreclosures, including the decline in value of nearby properties and the destruction of value in deteriorating vacant homes. This is a total value of $116 billion in foreclosure prevention alone.

Beyond just helping the unemployed individual and their family stay above water, unemployment benefits help our entire economy. It is a tragedy the GOP House was so adamant about slashing benefits when they are still necessary.


If you are in Georgia and you have questions about unemployment benefits please contact Atlanta employment attorney Ben Kandy


Another Victory for the Minimum Wage

Two Oakland Raiders cheerleaders who filed a class action lawsuit against the NFL franchise for violations of the federal and California minimum wage requirements recently settled their case with the Raiders. The team will pay out a total of $1.25 million to 90 women who cheered for the team between 2010 and 2013. In addition future Raider cheerleaders will be paid minimum wage for all hours worked, receive checks every two weeks, and be reimbursed for business expenses they incur in the course of the job.

Cheerleaders for the Cincinnati Bengals, Buffalo Bills, New York Jets, and Tamp Bay Buccaneers all filed similar lawsuits after the Raiders lawsuits were announced.

NFL cheerleaders, until these suits were filed, were commonly paid way less than minimum wage. For example Bengals cheerleaders alleged they were paid only $2.85 an hour for their work dancing at games. Many cheerleaders also alleged that they were required to work many hours of completely unpaid labor.

The Buffalo Bills cheerleaders, the “Buffalo Jills” claim they were required to perform unpaid work for the team for about 20 hours a week. Unpaid activities included: submitting to a weekly “jiggle test” (where cheer coaches “scrutinized the women’s stomach, arms, legs, hips, and butt while she does jumping jacks”); parading around casinos in bikinis “for the gratification of the predominantly male crowd”; and offering themselves up as prizes at a golf tournament, where they were required to sit on men’s laps on the golf carts, submerge themselves in a dunk tank, and perform backflips for tips (which they did not receive).

There is a common thread running through these cheerleader minimum wage cases and the unpaid internship minimum wage cases I discussed in previous posts. For-profit employers try to get people to work for them for free. Instead of money these unscrupulous businesses offer “exposure” or “experience” to get people to volunteer for their money making enterprise. In the vast, vast majority of cases a person can not agree to work for free for a for-profit business. Experience and exposure are valued by the law at zero dollars an hour.

It seems like there is a greater awareness among people that one must be paid minimum wage for all hours worked even if the employee “agreed” to not be paid. If you are working for a company that is a for-profit then they need to pay you! If you are a worker in Atlanta or Georgia more generally contact employment law attorney Ben Kandy.



Happy Labor Day

I hope you all had a good Labor Day holiday. Every year around this time news outlets and other organizations take stock of the state of the American worker. The consensus seems be that while there have been improvements since the start of the great recession, as a whole workers have not benefited from the recent economic gains. On the legal side there are new attempts at the executive, state, and local level to pass laws benefiting American workers.

First the bad news. In 2013, after-tax corporate profits as a share of the economy tied with their highest level on record. Labor compensation as a share of the economy hit its lowest point since 1948. Wage growth since 1979 has not kept pace with productivity growth. This means falling or flat wages for most workers and big gains for corporate bank accounts, shareholders, executives and others at the top of the income ladder.

But there is also good news. States and localities have been leading the way instituting new benefits and protections for workers in their jurisdiction. The California Legislature just passed a bill requiring employers to provide part-time employees with three paid sick leave days per year. The New Jersey Assembly says it plans on introducing a sick leave bill of its own, though Governor Christie has said he will veto the bill.

States have also been leading the way in increasing the minimum wage. Even GOP controlled states like Michigan have passed laws increasing the state minimum wage.

At the federal level President Obama has encouraged federal agencies that enforce worker protections to cover their turf with a renewed vigor. The Department of Labor has been leading the way by cracking down on employers who misclassify their employees as independent contractors. The National Labor Relations Board has released important rulings that may serve to force franchise companies like McDonalds to take more responsibility for the labor law violations of their franchisees.

President Obama has also issued a number of executive orders that help workers working for companies with federal contracts. One order raised the minimum wage for federal contract workers. Another order requires companies taking federal contracts to release information about past labor law violations.

With GOP extremism and intransigence being the order of the day it seems unlikely that there will be any movement in Congress to strengthen worker protections. The baton has been passed to the states, localities, and the executive branch to make the changes workers in America need.


FMLA and Holidays: Does a holiday everybody in the workplace gets off count against my FMLA time?

This weekend is the official “end of summer”. Lots of people will be using the long weekend to take a last road trip or beach vacation. Some people will be taking a staycation and some people will have to work. Other people will take the long weekend as an opportunity to rest and recuperate from a serious health condition while on Family Medical Leave Act leave.

A question that I get from time to time is “does the holiday count toward my FMLA leave limit?” Remember that eligible employees are allowed to take 12 weeks of unpaid medical leave in order to take care of their own serious health condition, the serious health condition of an eligible family member, and for maternity leave among other reasons.

What happens when a workplace wide holiday coincides with the employee’s FMLA leave? Do the holiday days count toward the 12 weeks of leave? The answer depends on how many days the employee worked during the workweek in which the holiday occurs.

If the holiday occurs during a week when the employee takes off the whole week as FMLA leave then the holiday DOES count toward their 12 week total. For example, this year Labor Day is on Monday, August 1st. If an employee had FMLA leave that started on July 23rd and ended August 8th the Labor Day holiday would count toward the 12 week leave allotment. This is because the employee would be out on leave for the entire week of 8/1 to 8/5.

If, however, the employee does not take the whole week as FMLA leave time the holiday DOES NOT count toward their 12 weeks of FMLA leave. Tweaking the previous example slightly, if the employee was scheduled to come back to work on August 4th instead of the 8th then the holiday would not count as FMLA leave time. This is because the employee would not have taken off the entire week of 8/1. They would have worked the 4th and 5th (Thursday and Friday) of that week. Only Tuesday the 2nd and Wednesday the 3rd would count as FMLA time.

A caveat to all of this is if the holiday is not a workplace wide holiday and the employee would have been working that day had they not been on FMLA, then the holiday DOES count as FMLA leave time.

The other situation where time off on FMLA does not count toward FMLA leave time is if the entire workplace is shut down for a week or more. For instance if a factory completely shut down for a week for repairs while an employee is on leave the time DOES NOT count toward that employee’s FMLA leave time.

The FMLA can be very technical and violations can happen accidentally. Fortunately for employees, a particular intent to deprive an employee of their FMLA leave is not required for a violation of the law. Even if an employer makes an honest mistake calculating the amount of leave an employee can take it can still be a violation if that mistake results in harm to the employee. If your employer is telling you that you are about to exhaust your FMLA leave time double check to make sure they have been calculating your leave correctly.

If you are in Georgia and think that your employer failed to correctly calculate your FMLA leave contact Atlanta employment law attorney Benjamin Kandy. As always, this page does not constitute legal advice. This page does not create an attorney-client relationship between attorney Benjamin Kandy and the reader. Contact a lawyer for advice about your particular situation.



Cutting Unemployment Benefits Did Not Promote Work

Over the last few years Republican politicians and thought leaders have pushed the idea that the reason the unemployed were not finding jobs was because unemployment insurance benefits were too generous.

The GOP House refused to extended federal jobless benefits that allowed some unemployed workers to receive up to 99 weeks of payments. A number of Republican controlled states also slashed state unemployment benefits cutting the number of weeks one could receive as well as the size of the benefit. The most radical cuts happened in North Carolina.

These state level benefit cuts helped to create a natural experiment where economists and other social scientists could compare states that had cut unemployment benefits with those states that did not cut unemployment benefits.

Economists on the left and the right have been looking at the data. Comparing outcomes in states that made benefit cuts like North Carolina, to nearby states that did not cut benefits shows at a minimum benefit cuts do not help the unemployed find a job. Groups like the left wing Economic Policy Institute and the right wing American Enterprise Institute have confirmed that cuts to unemployment did not help the states making cuts to grow faster or have less unemployment.

The evidence also shows that unemployment insurance payments help stabilize a weak economy. Economists examining the great recession found that the Federal expansions of UI helped to avert about 1.4 million foreclosures and $70 billion of housing-related deadweight losses between 2008 and 2012.

Unemployment benefits are a vital part of the safety net. The benefits are earned through work and are only available to people who have worked enough to qualify. One would think that unemployment benefits would be the last type of benefits to be cut when the economy is still not fully recovered from a major recession.


An Example of Guts and Determination

I have written a few different posts about unpaid internships. Thankfully companies are starting to convert their unpaid internship programs to paid positions due to legal pressure. Individual lawsuits and government action at the state and federal levels have shed light on how widespread unpaid internships had become. In the media industry unpaid internships were/are especially common. As a result media companies like Hearst Magazines, Fox Searchlight, Gawker, Condé Nast, and Warner Music have all been subject to lawsuits claiming violations of the Fair Labor Standards Act.

Combating illegal unpaid internships had been difficult because potential plaintiffs were hesitant to come forward and sue the company that had given them the internship. Internships are now the main path of entry into a number of industries and some potential plaintiffs felt, probably with good reason, that filing a lawsuit over an illegal internship would affect their ability to get a job in the future.

It takes a brave person to stand up to a big company in a glamourous industry and say “enough!” Kimberley Behzadi was brave enough to be that person.

Ms. Behzadi got an internship with ICM partners, a huge literary and talent agency. Over a five month period Ms. Behzadi worked long hours for no pay. Ms. Behzadi realized that making a stink about the lack of pay would imperil her chances of getting a job in the industry after graduation.

“Unpaid internships are almost an acceptable thing in the industry — there were 100 other people who wanted my internship. If I voiced grievances about not getting paid, I would have been bumped out and that would leave me nowhere, with little chance of finding work in the industry.”

Like most unpaid internships, Ms. Behzadi spent most of her time doing work that benefited the her employer. For example she would read and summarize scripts, answer phones, do expense accounts for agents and maintain the weekly calendar of comedy events to help the agency scout up-and-coming comedians. ICM said in legal filings that it ran an “educational internship program” but I don’t know what Ms. Behzadi learned other than simple administrative skills.

Even though these internships teach few actual skills, they are still in high demand. ICM said its “academic internships” were coveted, with more than 300 people applying a year and only 10 to 15 percent of applicants being given internships. Kids realize that these unpaid internships are becoming almost the only way to break into many industries.

Without people like Ms. Behzadi willing to put it on the line we all would be a little bit worse off. In the US individuals can make a big difference in all of our lives by bringing the right lawsuit at the right time.


The Restaurant Oppurtunities Centers United

I recently saw this video that explains the tip credit for restaurant servers and why they can be paid less than the federal minimum wage of $7.25 an hour. The restaurant industry has been one of the main industries where I have tried to focus my practice. Restaurants have lots of issues with tips, tip pools, unpaid overtime, and sexual harassment.  I think I like to help restaurant workers because I have worked in a number of restaurants and so I have seen first hand the violations that are common to restaurants all over the country.

The video was released by an organization called Restaurant Oppurtunites Centers United (ROC). ROC was originally founded in NYC after 9/11 in order to support restaurant workers displaced by the WTC tragedy. Since then ROC’s mission and geographic scope has expanded to support restaurant workers and advocate for better working conditions all over the country.

Some of the issues that ROC is working on include a Fair Minimum Wage and paid sick days for restaurant workers. ROC also produces a dinners guide to help restaurant patrons choose restaurants that treat their workers fairly and with dignity.

Even if you don’t work at a restaurant there is a lot you can do to help make restaurants a better place to work. Check out the ROC’s website and dinners guide to see how you can help.

If you are a restaurant worker check out the ROC website and see if there is a chapter in your city. If there is no chapter in your city contact ROC to see how you might be able to help start up a chapter where you live and work.

As always, if you are a worker in Georgia who believes they have been mistreated at work, contact Atlanta employment attorney Ben Kandy for a consultation.



support to restaurant workers displaced as a result of the World Trade Center tragedy – See more at: http://rocunited.org/about-us/our-history/#sthash.HAmiKuGw.dpuf
support to restaurant workers displaced as a result of the World Trade Center tragedy – See more at: http://rocunited.org/about-us/our-history/#sthash.HAmiKuGw.dpuf
support to restaurant workers displaced as a result of the World Trade Center tragedy – See more at: http://rocunited.org/about-us/our-history/#sthash.HAmiKuGw.dpuf
initially founded after September 11th, 2001 to provide support to restaurant workers displaced as a result of the World Trade Center tragedy – See more at: http://rocunited.org/about-us/our-history/#sthash.HAmiKuGw.dpufin NYC after
initially founded after September 11th, 2001 to provide support to restaurant workers displaced as a result of the World Trade Center tragedy – See more at: http://rocunited.org/about-us/our-history/#sthash.HAmiKuGw.dpuf

Federal, State, and Local Governments Try to Make Sure Part-Time Workers Have Steadier Schedules

In the service industry it is common for part-time employees to have “on-call” shifts as part of their weekly schedule. On-call shifts are usually where an employee is told they should be free on a particular day and time in case they are needed. The on-call employee may or may not actually get to work during the shift. It depends on the store’s needs. If the employee is not called in to work then they don’t get paid. Another common scenario is the on-call employee is called into work, but their shift is only a couple of hours. This means the employee has to rearrange their entire day for a couple hours of pay typically at a low hourly wage. On-call shifts are especially difficult for parents. The employee has to make childcare arrangements for a work shift that may not happen or may only be for a couple of hours. On-call shifts also make it impossible for a part-time employee to have other part-time jobs to supplement their income.

The problem of unsteady shifts for part-time workers extends to schedule making practices in general. It is common for schedules to be made only days in advance of an employee’s shift. This makes it very difficult for part-time employees to plan for other jobs, school, or family responsibilities.

States and local governments are recognizing the problem of on-call shifts. Laws are being introduced to help stem some of the worst uses of on-call shifts and as needed scheduling. The proposed laws focus on two different ways to make on-call shifts better for employees. One proposed law would require companies to pay employees extra for on-call work. The second proposal would require employers give two weeks’ notice of a work schedule to give employees the ability to better plan their life schedules.

Representative George Miller of California, the senior Democrat on the House Committee on Education and the Workforce, plans to introduce legislation this summer that would require companies to pay their employees for an extra hour if they were summoned to work with less than 24 hours’ notice. He is also proposing a guarantee of four hours’ pay on days when employees are sent home after just a few hours — something that happens in many restaurants and retailers when customer traffic is slow. Senator Bob Casey, Democrat of Pennsylvania, has introduced a similar bill in the senate.

At the federal level these bills are unlikely to go anywhere. The GOP is against anything that would make life easier for workers. The problems of unsteady shifts and working on short notice is for business and the GOP an example of “flexibility.”

Anytime a business organization or the Republicans talk about flexibility you know it is meant to be flexibility for the employer. Nothing the GOP ever supports is good for workers. Republicans are concerned only with the rights of capital and management. Business wants employees who are available anytime the employer needs them for any amount of time the employer requires. The needs of the workers does not factor into their decision making. Only through collective bargaining either via a union or using the democratic power of government can flexibility be made to work for employees and employers.

If you are having a problem with your employer in Georgia contact Atlanta employment lawyer Ben Kandy.