Recently, a restaurant made headlines for something other than its food.  A restaurant employee leaked a version of the store's non-compete agreement and the document raised some eyebrows.  Specifically, the leaked document provided that employees would not work at any restaurants within three miles of a store if the other restaurant "derives more than 10% of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches.:  Although there was no discussion about whether the store ever tried to enforce the non-compete agreement, it does raise some interesting questions for employers to consider when it comes to restrictive covenants like a non-compete.

The first question is most likely whether the agreement is enforceable.  Like most legal questions, the answer is "it depends".  In order to reach a more definitive answer there are a number of questions to ask.  In what state was the store located?  In what state is the dispute arising?  Was it a delivery driver, food preparation staff, hostess, waitress, or store manager that signed the agreement?  The answers to these types of questions can make a big difference and can determine whether the agreement is enforceable.

Another common question related to a non-compete agreement is why?  Employees who are asked to sign non-compete agreements frequenly ask employers why such an agreement is necessary.  A court considering enforcement of a non-compete is likely to wonder the same thing.  While employer responses may vary, typcially the goal is to protect confidential information, trade secrets, customer lists, etc.  The application of the non-compete to the types of concerns can vary dramatically depending on the employee and the specific position.  Employers should      Continue Reading...

Last month we told you about the amendment to the Kansas Wage Payment (KWPA), which goes into effect on July 1. In short, the changes greatly expand the circumstances under which employers may make payroll withholdings or deductions without violating the KWPA. To maximize your organization’s ability to avail itself to these new provisions, you should consider having employees (at least the non-exempt ones) sign agreements prospectively authorizing deductions to cover any past or future payroll overpayments, loans, advances, or failure to return or pay for employer-provided merchandise. But be careful in applying your new rights under the KWPA to exempt employees.  Even if making a certain deduction is allowed by Kansas law, doing so could present potential liability under the federal Fair Labor Standards Act (FLSA).  Read on to understand why.

1. as repayment of a loan or advance the employer made to the employee during the course of and within the scope of employment;
2. to recover a payroll overpayment; and
3. to compensate the employer for the replacement cost or unpaid balance of the cost of the employer's merchandise or uniforms purchased by the employee. 

On April 1, Governor Brownback signed into law a bill that gives employers more latitude to make payroll deductions to recoup overpayments, loans, and property provided to employees. Kansas employers have long pushed for this change. The bill, Senate Substitute for HB 2022, becomes effective on July 1. Read on to understand these revisions and what you can do to maximize their benefit to your organization.

Under current Kansas law, an employer may withhold wages in only limited circumstances, such as: (1) when specifically required by law (such withholdings for payroll taxes or garnishments); (2) for healthcare; (3) deposits into a retirement plan; and (4) when the employer has a signed authorization from the employee for a lawful purpose "accruing to the employee's benefit." Old Kansas Department of Labor regulations take a narrow view on what type of deductions accrue to the employee's benefit.

1. as repayment of a loan or advance the employer made to the employee during the course of and within the scope of employment;
2. to recover a payroll overpayment; and
3. to compensate the employer for the replacement cost or unpaid balance of the cost of the employer's merchandise or uniforms purchased by the employee.

In addition, upon providing      Continue Reading...

Last month a bill was introduced in the U.S. Senate to provide a limited federal cause of action for employer use in protecting a company's trade secrets from misappropriation. The Protecting American Trade Secrets and Innovation Act of 2012 was introduced and referred to the Senate Committee on the Judiciary.

The goal of the bill is to provide a federal cause of action to employers attempting to file litigation to protect a company's trade secrets. As currently structured, the new legislation would provide this cause of action under a limited set of circumstances. The current option for an employer is to bring claims in state courts with the underlying law varying significantly from state to state. This variance in state law can create complications and sometimes make it difficult for companies to effectively defend their confidential information. 

Stay tuned as this bill makes its way through the legislative process.

To track the legislation, click here.