Tuesday, November 24, 2015

Did You Know That a "Temp" Can Also Be An "Employee?"

For all you employers out there who regularly rely on "temp" agencies to supply individuals to fill gaps your day-to-day operations and cover for exigencies that arise, a recent decision from the Third Circuit Court of Appeals should give you pause and (perhaps) yet another thing to worry about (yay, law!)

In Faush v. Tuesday Morning, Inc. (available here), the Third Circuit held that a "temp" worker assigned by a temp agency to work at Tuesday Morning, Inc., could be considered an "employee" of Tuesday Morning for claims of race discrimination under Title VII and the Pennsylvania Human Relations Act (PaHRA).

The factual scenario was rather unremarkable and probably familiar to most employers. Tuesday Morning (a home-goods retailer) was in the process of opening a new store in Pennsylvania. But because it didn't yet have a full complement of employees at the new store, it needed to bring in some "temp" workers as a "stopgap measure." So, Tuesday Morning contracted with Labor Ready, a temp staffing firm, for help. One of the individuals Labor Ready sent to work at Tuesday Morning was Matthew Faush. Faush was an employee of Labor Ready, and only worked at the Tuesday Morning store for a few days. He claimed that while there, he and other African-American "temp" employees were subjected to racial slurs and abuse by white workers and the manager of Tuesday Morning. Faush filed suit against Tuesday Morning under Title VII and the PaHRA, claiming he was an "employee" of Tuesday Morning and had suffered from unlawful race discrimination.

Tuesday Morning sought (and won) a legal ruling from the trial court dismissing Faush's case on the basis that Faush was not its employee.

The Third Circuit disagreed.

After examining all the facts, the Court held that while Labor Ready set Faush's pay rate, paid his wages, taxes, and social security, and maintained his workers' compensation insurance, those factors did not foreclose Tuesday Morning's classification as Faush's "employer." Specifically, the Court noted that Faush worked exclusively at Tuesday Morning's store and Tuesday Morning assigned Faush all of his job tasks, which were the same or similar to those Tuesday Morning assigned its regular employees. Tuesday Morning supplied Faush with all of the tools and materials he needed to complete his assignments, verified his working hours, directly supervised his tasks, and provided him with site-specific training. The Court also found that by because Tuesday Morning paid Labor Ready an hourly rate that was dependent upon the number of hours Faush worked (including any potential overtime), Tuesday Morning was really "indirectly pa[ying] [Faush's] wages, plus a fee to Labor Ready for its administrative services." The services contract between Labor Ready and Tuesday Morning also provided that Tuesday Morning retained ultimate control over whether Faush was permitted to work at its store, and could request a replacement employee for Faush at any time. The agreement even referred to Faush (and all of the other "temp" employees supplied by Labor Ready) as "Temporary Employees,"of Tuesday Morning, and required Tuesday Morning to maintain a workplace that was "free from discrimination and unfair labor practices," in compliance with "all applicable federal, state and local laws and regulations concerning employment," including Title VII. The Court thus held that it was ultimately up to a jury to determine whether, on these facts, Tuesday Morning was Faush's "employer."

This case serves as a stark reminder for employers that sometimes, employees can have two "masters" (or as the law refers to it, "joint employers.") Just because an employer brings on a worker from a temp agency on a short-term assignment and the worker gets his/her paycheck and W-2 from the temp agency, does not automatically mean the employer is immune from claims under the federal and state anti-discrimination laws.

So, the take-away practice tip for employers here is: make sure to treat your "temp" workers the same way you treat your regular employees, because at the end of the day, the law may already be doing so.

Tuesday, September 22, 2015

When Non-Competes are Non-Specific, Bad Things Happen

There are not many things in business as bad as a former employee setting himself or herself up in direct competition with his or her former employer. It's worse, however, when the former employee is permitted to do so in the face of a non-compete agreement that the employer originally thought was air-tight. 

Such was the scenario that Boyds clothing store recently found itself in, when it tried to prevent one of its former men's and women's footwear floor managers from opening up his own shoe store in Philadelphia. That former employee had previously signed a non-compete agreement with Boyds, which prevented him from:
"directly or indirectly, individually or as a partner or as an agent, employee or stockholder of any corporation or otherwise. . . [s]olicit or accept a job offer from another men's and or women's retail clothing company who engages in the sale of men's and/or women's clothing that is within a (50) mile radius,"
of any Boyds' store, following the end of his employment.

Pretty straightforward, no?

Not quite. 

The Pennsylvania Superior Court disagreed with Boyds' contention that the language above prevented the former employee from starting up his own shoe store. Distilled to its core, the Court held that by going into business for himself, the former employee had not "solicited" or "accepted" a job offer from a competitive retail clothing store. Not willing to accept form over substance, the Court rejected Boyds' argument that the former employee's own shoe store—a separate legally incorporated entity—had, in effect, "offered" him a "job," upon its creation, which the former employee then "accepted," placing him in violation of the non-compete agreement. Instead, the Court found that the plain language of the non-compete agreement simply did not prevent or preclude outright ownership of a competing business; rather, it prohibited only soliciting and accepting a job offer, not staring up one's own establishment. Those are two different things. 

The lesson of this case should be obvious; non-compete agreements (like all legal contracts, for that matter) should say what is meant and mean what is said. That maxim, unfortunately, is often elusive in the the world of highly-convoluted, grammar-strained legal writing, which attempts encompass all known scenarios and possible outcomes by employing broad, generic, and occasionally obtuse language. But it doesn't have to be that way. Just because a legal document—whether a non-compete agreement, employment contract, or independent contractor agreement—carries with it binding obligations and requirements under the law, doesn't mean that it needs to be written like dusty law textbook. Contracts such as these should employ simple, non-technical language that is capable of being both easily read and easily understood, and is not subject to questionable interpretations. Similarly, over-arching concepts and descriptive scenarios should be espoused in favor of plain-English statements of intent and direction. 

If Boyds had truly wanted to prevent its former employees from starting up their own clothing businesses down the block and siphoning away potential customers, it should have written its non-compete agreement to say exactly that. For example, "after termination of employment with Boyds, the employee agrees not to own, control, or manage any men's or women's retail clothing business located within 50 miles of any Boyds' store," is easy-to-understand language that could have accomplished Boyds' intent, protected its legitimate business interests, and avoided the exact scenario it now finds itself it. 

Oh, and it probably would have saved Boyds a lot of money in attorneys' fees, as well. 

Tuesday, September 15, 2015

Tip of the Day: If You Are a Teacher, Don't Go Online and Call Your Student a "Lazy A**hole."

Sounds like self-evident advice, no? Well, to Natalie Munroe, it wasn't. 

Munroe was an English teacher at Central Bucks School District who, in 2009, began writing her own personal blog, which was intended to be maintained primarily for her friends, not the public at large. 

In 2010, Munroe took to her blog and wrote an article in which she identified a list of suggested comments she believed teachers should include on their students' report cards in order to more accurately reflect what those teachers "really want to say to [those] parents." Her suggestions included comments such as:"has no business being in Honors," "dunderhead," "rat-like," "liar and cheater," "unable to think for himself," "tactless," and "lazy asshole." 

A few months later, Munroe composed another blog post where—in the midst of also complaining about the temperature her classroom was kept at and which musical artists she found loathsome—she griped about "an obnoxious kid" in her class, and about another child whom she referred to as a "jerk," for missing an assignment after being out of school for 3 days because his family went on vacation.

The content of Munroe's student-related blog postings came to light following an investigation by a local newspaper. After word of Munroe's blog posts made the rounds through the student body, the parents, and the administration, Munroe was eventually fired. 

Big shocker. 

Following her unceremonious dumping by the School District (some might call it "karma"), Munroe sued, arguing that the School District had unlawfully violated her First Amendment right to free speech by firing her because of the contents in her blog

The Third Circuit Court of Appeals recently disagreed, holding that the First Amendment provided Munroe no protection from termination due to the contents of her blog.

Unlike private-sector workers, employees of a public employer (like a school district) continue to enjoy a First Amendment right to free speech, and do not surrender that right simply because they choose to work for the government. That right, however, is not absolute. As an employer, the government has legitimate interests in maintaining the efficient administration of the workplace, and ensuring that public employee speech does not interfere with the performance of employee job functions. So, a public employee's speech only finds protection under the First Amendment if it: (1) involves a matter of public—as opposed to private—concern; and (2) the government lacks an adequate justification for treating the employee differently than the general public based upon its needs as a employer. 

In its decision, the Third Circuit first found that the contents of Munroe's blog failed to qualify as speech involving a public concern. Even though portions of her blog discussed the education of her students and the operations of the Central Bucks School District in general, the majority of its contents—when viewed as a whole—addressed merely private issues, such as what types of musical artists Munroe disliked, pie recipes, and movie reviews. Hardly the stuff of vigorous public debate. Moreover, even if Munroe's blog contents had satisfied the "public concern" requirement, the Court held that her First Amendment retaliation claim still failed, inasmuch as the School District had established that the notoriety garnered by Munroe's now-infamous online rantings had disrupted the work of both the student body and the administration. As the Court put it: "Munroe's various expressions of hostility and disgust against her students [disrupted] her duties as a high school teacher and the functioning of the School District." Because the Court determined that Munroe could not satisfy either element identified above, it held that she enjoyed no First Amendment protection from termination due to the contents of her blog.

The take-away for governmental employers here is that while claims of First Amendment protection by public employees are never cut-and-dry, speech that may appear on its face to touch on a matter of public concern does not automatically entitle the speaker to constitutional job security, nor does it eliminate any disciplinary recourse by the employer. 

The moral of Munroe's story for employees (whether public or private) is: be extra, extra careful about what you put online, even if what you post is only intended for a selective audience. The Internet is not "private" by any stretch of the imagination, even if you label something as so. Basically, if someone other than you can read what you wrote, then chances are your employer might read it some day, as well. So, if you cannot resist the urge or temptation to write something online, edit it thoroughly, and err on the side of omission rather than inclusion. You may also want to take the time to have someone else read it before you click "post," just to be sure.

Unless, of course, you are just a "lazy asshole."