This Weekend's Message - Pregnancy Bias

Sometime ago I noted there seemed to be an employment law story each weekend that was picked up by a number of papers across the country. This weekend, in addition to the stories of Arnie's past gropings, it seems to be pregnancy discrimination. The AP story is carried in the Chicago Daily Herald as well as a number of other papers across the country. Last year charges of pregnancy discrimination filed with the EEOC increased by 10%. As might be expected, there are differing views on the reason, with some claiming increased knowledge of their rights and higher positions by women and others noting the tough economic times. While there may be disagreement on the reason, given the number of stories this weekend, it probably would not be a good week to push the envelope on a close decision involving an employee who is pregnant.

Austin Court Holds Covenant Not To Compete Invalid For Reasons That Make Me Look Like Carnack

Well maybe not as good at predicting as Johnny Carson's Carnack, but when I reported yesterday on Beasley v. Hub City, Inc. , I noted the outcome would likely have been different if the employer had not been been able to show that the type of confidential information provided after signing a non-compete upon becoming president, truly was different from what he had access to before. Sure enough that is the holding of Alex Sheshunoff Management Services, L.P. v. Johnson (Tex. App. - Austin 10/2/03). Since the employee was given no new confidential information after he signed the covenant, it did not meet the tests of Light. The Court also held that mere daily changes in the information in the daily course of business was not sufficient, and that the promise of 2 weeks notice was not sufficient, since it was highly unlikely the employer would have actually imparted any confidential information to the employee after giving the notice.

Updated: Almost two years after it was argued the Texas Supreme Court finally issued its opinion in Sheshunoff, see Major Change in Texas Non-compete Law.

White Collar Regulation Reform Goes Down In the House

The House of Representatives has just voted by 221-203, to instruct the conferees of the House to accept the Harkin amendment which would have the effect of preventing the Department of Labor going forward with the proposed white collar exemption regulations. Although technically non-binding, it would seem to make it highly unlikely that the provision will not be in the final bill. If, as it seems likely, there is an omnibus appropriation bill, it makes it even less likely that there would be a presidential veto. (Even without an omnibus appropriations bill the chance of a veto was probably somewhere between slim and none.)



The only good news is that my decision not to spend much time learning the details of the proposed regulations seems to have been a wise one. Good for me, but a real tragedy for the country as a whole not to get some clarity on such an important issue.

Assault By Supervisor - Workers Comp Bar Applies; Company Not Liable For Intentional Tort

An employee who returned late from work was struck with a steel pipe by his supervisor. (Not a recommended practice to cure tardiness.) The supervisor ultimately pled no contest to a criminal assault charge. The employee sued the company under a negligence theory and also for the intentional tort of the supervisor. The court held that the 3rd party personal animosity exception did not apply, since the assualt resulted solely from a work related incident. Thus workers comp barred all claims founded in negligence. When the employee countered that the employer was liable for the supervisor's intentional tort, the court rejected that claim as well. Only if the supervisor were the equivalent of the alter ego would liability be proper. Here there was no such finding, so no liability. The final shot was a retaliation claim brought under the Texas Commission on Human Rights Act. The only alleged protected activity was filing this suit, which had no relationship to the protected categories outlined in the Texas Commission on Human Rights Act. With no connections on three tries, the struck employee, effectively struck out. Urdiales v. Concord Technologies Delaware, Inc. (Tex. App. - Houston [14th Dist.] 9/30/03).

Centel Cellular v. Light - Once More Around the Track - Court Upholds Covenant Not To Compete

Texas courts, and parties are beginning to show increased understanding of drafting, arguing and deciding cases to conform with the peculiarities of Texas covenant not to compete law as interpreted by the Texas Supreme Court in Centel Cellular v. Light. (One of the legacies of then Justice, now Senator, John Cornyn). It seems clear that a promise by the employer to provide confidential information to an employee in return for a covenant will meet the 'otherwise ancillary to an enforceable agreement" standard of Light. In Beasley v. Hub City Texas, Inc. (Tex. App. - Houston [1st. Dist.] 9/29/03), the facts were not that straightforward. Here, an employee was promoted to President. While the contract provided that he would be provided access to confidential information, the employee argued that he already had the information before, so there was no consideration. If proven, that would have probably defeated the covenant. Unfortunately for him, his employer had proven to the trial court's satisfaction that it had provided confidential information to him that he did not have access to as Vice President. Indeed, the Court had so found in one of its findings of fact. Under those circumstances, the Court found that it fell within the parameters laid out by the Supreme Court in Light and upheld the Court's entry of a temporary injunction enforcing the covenant not to compete.

What Employers Fear Most - Settlements (and Successful Suits) Beget More Claims

Fort Lauderdale is getting a reputation as more than a place for a fun spring break. Based on what has happened the last two years, its employees appear to see it as an easy mark for discrimination complaints. Sonji Jacobs of the Miami Herald has a story on the most recent jury verdict which ended Tuesday, with an almost $500,000 verdict, which could double before it is finally resolved. The case involved a maintenance employee who claimed he was not promoted because he was Haitian. He remained employed during the litigation and convinced the jury that he had been retaliated against following his complaint.



Since 2001, the City (and its insurer) has paid out almost $2 million. The City manager resigned last Friday, after having to deal with a "steady stream of complaints", many filed under its predecessor. An unfriendly way of being reminded of the importance of good employment practices, proper treatment of your employees, and the appropriate handling of complaints.

Rash of EEOC Litigation

In reviewing federal court filings across the country for the last few days, I noticed a large number of lawsuits filed by the EEOC. Given that they file relatively few suits per year, I was curious about the timing of so many suits at once, until it dawned on me that it was the end of the government's fiscal year. So for those of you who have or will soon receive an invitation to litigate with the EEOC, give thanks that your federal tax dollars are actively at work.