When companies sue their former employees for theft they often claim that the former employee’s new employer has conspired with the former employee to misappropriate trade secrets, or that that new employer has aided and abetted the former employee’s breach of duty he/she owed to his/her former employer.

Like Woodward and Bernstein, liability “follows the money.”  CurreChuck Post 07_finalnt employers are often added to trade secret and breach of duty lawsuits because they have deeper pockets than former employees.  Conspiracy and aiding and abetting claims are more vague and less precise than are other business claims.  Often plaintiffs need only allege that the new employer benefitted from wrongful acts.  Employers should not believe that there is nothing they can do to reduce the chances of a successful conspiracy or aiding and abetting claim against them.  By adopting best practice policies and procedures, an employer can do a lot to reduce the likelihood that it will be found liable on these theories.  These policies and practices should be adopted well in advance of the hiring of a competitor’s employees.  Although there are many policies and practices that an employer can adopt, two of the most common (and most powerful) are: (1) a policy in the employment handbook that prohibits the use or importation of third party or prior employer information.  Such policies often read:

As a condition of employment, employees of the company agree and represent that during the course of their employment with the company, they will not use or disclose any confidential or proprietary information of any third party, including any prior employer, unless such third party has consented to the use or disclosure of that information in writing.

Moreover, as a condition of employment, employees of the company are required to comply with the terms of any agreements where any prior employer pertaining to confidential information, non-solicitation or non-competition to the extent that such agreements are enforceable under applicable law.

Second, employers can, in their offer letters, expressly condition employment upon the non-importation or use of any information from the former employer.  Such language often provides that:

This offer of employment is conditioned upon your agreement that you will not bring any proprietary, confidential or any other business information from any place or former employment to the company.  The company will provide everything you need to perform your work.

While nothing can guarantee that your company will not be named as a conspirator of abettor in a trade secret or breach of duty case, adoption of policies like this will help.

Senate and House of Representatives Pass the Defend Trade Secrets Act (DTSA).  First federal trade secret bill awaiting presidential signature. Chuck Post 07_final

More details can be found at the following Forbes article:  “The New Defend Trade Secrets Act is the Biggest IP Development in Years,” dated April 28, 2016.

Summary of Program

The risks involved in misclassifying a worker as an independent contractor rather than an employee have always been serious. A number of federal and state agencies regulate the proper classification of workers and have the authority to impose significant monetary and non-monetary sanctions against employers who get the classification wrong.L&E2015

Program Highlights

This informative webinar will cover the legal landscape of independent contractor status. Topics will include:

  • A summary of the various tests applied by federal and state agencies to determine independent contractor status;
  • A summary of the enforcement authority of various federal and state agencies and the sanctions they may impose;
  • The due diligence employers must engage in before classifying a worker as an independent contractor; and
  • California’s law imposing monetary and non-monetary sanctions against employers (and other individuals) who willfully misclassify workers as independent contractors.

If you or your company is currently using independent contractors, this is a webinar you won’t want to miss. Register today!

Date:  May 12, 2016

Time:  12:00 p.m – 1:00 p.m.

To register for this webinar, please RSVP to Ramona Carrillo at rcarrillo@weintraub.com.

Many – maybe even most – contracts issued by major payroll processing services contain traps for the unwary. Many employers I speak with turn over all payroll processing responsibilities, including issuance of accurate checks and wage statements and record storage, to their payroll processing service.

This may be a big mistake.

When faced with an individual or a class-action wage and hour claim, many employers turn to their payroll processing service to produce records that evidence the Company’s compliance with California law. Yet many of these payroll processing services expressly disclaim any responsibility to maintain records or to ensure wage statements comply with the law.  Indeed, some of these contracts actually require employers to indemnify the payroll services company against any claims that wage statements or wages were not in paid compliance with applicable law.Chuck-Post-07_web

Maybe it’s just me, but I think that this is outrageous. Most employers I talk to believe their payroll processing company is their partner in ensuring that the business complies with California law. Read your payroll processing contract carefully. You may not have a partner in your payroll processing company. In fact, your company may be completely on its own. Employers have statutory duties to ensure that they both pay their employees properly and keep records of those payments.  Additionally, the law requires that employers issue detailed wage statements explaining how the wages were calculated and paid.  Failure to comply with these wage statement, payment and recordkeeping requirements can result in breathtakingly large liability.

To my mind these common contract provisions in payroll processing contracts require employers to do two things:

  1. Shop aggressively for a payroll service that will indemnify your business against the payroll service’s errors and that will agree to keep and maintain all records required under California law without additional charge.
  2. Audit the performance of your payroll service company (to ensure compliance) and regularly download all records the employer is obligated to maintain.

PAGA and class action liability for failure to comply with these laws can be breathtaking. If you have any doubt about your Company’s obligations please contact your employment law advisor immediately.

On April 11, 2016, Governor Brown signed Assembly Bill (AB) 908 which amends certain provisions of California’s Unemployment Insurance Code as it relates to the State’s Paid Family Leave (PFL) program.  Before explaining the amendments provided for under AB 908, I think it is important to clarify something that is too often misstated in the press.  Despite its name, California’s PFL program is not a statutory leave of absence program that guarantees paid family leave to employees in California.  Instead, it is a partial wage replacement benefit for eligible employees who are on some other authorized statutory or discretionary leave of absence from work.  As such, employees do not have the right to “take leave” under the PFL program. Continue Reading Governor Brown Signs Bill to Expand the Amount of Wage Replacement Available under California’s Paid Family Leave Law