“Suitable seating” class actions have been on the rise in the last couple of years in California. The first “suitable seating” class action is currently under review by a trial judge in San Francisco. However, in the meantime, the Ninth Circuit has decided to consider a related case against Wal-Mart, where plaintiffs’ attorneys are claiming damages in the amount of $150 million. The appeals court has agreed to review class certification of roughly 22,000 California cashiers who claim they were denied a place to sit in violation of state labor regulations. It is no wonder businesses are fleeing to the greener pastures of Texas and other states that do not exhibit an abject hatred toward employers. Hopefully these courts will consider the impact of their individual decisions and provide California’s embattled employers with some relief (or at the very least some clarity). See: http://www.law.com/jsp/law/sign_me_in.jsp?

One focus of this blog is how an employer’s use of non-compete agreements often runs afoul of California’s Business and Professions Code section 16600. Generally, the employer finds that its “non-compete” agreement will be held unenforceable by a court should it seek to enforce one against a former employee. But what can happen when one employer “agrees” with another employer not to recruit or hire each other’s employees?

On November 16, 2012, the U.S. Department of Justice and California’s Attorney General filed separate lawsuits against eBay, Inc. alleging violation of antitrust laws arising out of such an agreement. (The State of California’s lawsuit also names Intuit, Inc. as a co-conspirator.) The lawsuit arises out of an investigation conducted by the U.S. Department of Justice in 2009-10 into “no-hire” arrangements between high-tech firms in Silicon Valley.

The complaints allege that between 2006-2009, eBay and Intuit had a “handshake” agreement that they would not recruit or hire each other’s employees. This alleged agreement arose out of a “war for talent” that Silicon Valley firms experienced while competing for a limited number of employees with highly specialized knowledge, skills and experience in the technology industry. The “handshake” agreement was apparently the subject of several emails between eBay and Intuit executives that are cited in the complaints. While the agreement appears to initially have begun as a no-recruiting policy, it apparently morphed into a “no-hire” agreement, even when an applicant (employed by one of the companies) approached the other for employment unsolicited. The complaints allege that the agreement between eBay and Intuit harmed the market for these employees by limiting their job mobility and “affected employees’ ability to secure better compensation, benefits, and working conditions.”

Similar lawsuits were filed by the U.S. Department of Justice in 2010 against Adobe Systems, Inc., Apple, Inc., Google, Inc., Intel Corporation and Pixar. Those lawsuits were apparently resolved when the companies agreed not to engage in further “no-hire” agreements. (A separate class action civil lawsuit brought by affected employees is still pending against these companies.) eBay is alleged to have halted its “no-hire” agreement with Intuit in or about 2009 when it learned of the federal government’s investigation into such agreements.

Employers are again reminded to proceed with caution when considering whether and how to restrict a former employee’s ability to compete.

By:  Chelcey E. Lieber

Let’s say an employee was “completely incapacitated” and needs to take leave due to a back injury. The employee is granted leave, but then terminated while on leave. This sets the perfect stage for a successful interference and retaliation claim, right? The Court in Jaszczyszyn v. Advantage Health Physician Network disagreed (full opinion may be found here: http://www.ca6.uscourts.gov/opinions.pdf/12a1152n-06.pdf).

Continue Reading Facebook Pictures Enough for the Sixth Circuit to Uphold the Employer’s “Honest Belief” Defense (Sara Jaszczyszyn v. Advantage Health Physician Network)

By:  James Kachmar

Those of you who attended our November 15, 2012 seminar, “Risks and Benefits of Social Media and Computers in the Workplace,” heard us discuss recent actions taken by the National Labor Relations Board (“NLRB”) regarding Social Media Use Policies adopted by employers to address the many issues that may arise with the increased use of social media (Facebook, LinkedIn, Twitter, etc.) by their employees. As we mentioned, the NLRB was slow to address the issue of social media in the workplace. However, the NLRB has recently become much more active and more critical in how it views social media policies and their impact on the rights of employees to organize.

Continue Reading NLRB Continues Crackdown on Company Social Media Policies

By:  Meagan D. Christiansen

On November 6, 2012, nearly sixty percent of San Jose’s residents voted to raise San Jose’s minimum wage to $10.00. In doing so, San Jose became the fifth city in the United States to institute a higher minimum wage than otherwise required, joining San Francisco, Washington, D.C., Albuquerque and Santa Fe. Expected to take effect in late February or early March 2013, the new wage floor will cover all employees working more than two hours a week for a particular employer, as well as employers who maintain a facility in San Jose (unless that employer is exempt from the business license tax under the San Jose Municipal Code). As the expected implementation date approaches, check back to our blog for further details.