New York Employment Lawyer Blog

Second Circuit Reinforces High Standard Necessary To Enforce Non-Compete Agreements in New York

Fri, 20 Jan 2012 20:08:29 -0500

On November 3, 2011, in Int'l Business Machines Corp. v. Visentin, the Second Circuit Court of Appeals affirmed a Southern District of New York decision denying IBM's application for a preliminary injunction to enforce a non-compete agreement and prevent a former employee from working for a competitor.

Visentin was employed by IBM in numerous roles over twenty-six (26) years. From 2007 through the end of his employment, he was General Manager of IBM's Integrated Technology Services ("ITS") business, where he was responsible for the development and sale of ITS products and services throughout North America.

On January 19, 2011, Visentin announced that he was leaving IBM to work for a competitor, Hewlett-Packard. However, Visentin had previously signed a non-compete agreement with IBM, which provided that he would not, during his employment and for a period of twelve (12) months following the termination of his employment, become employed by any competitor of IBM in any geographic area in the world for which Visentin had job responsibilities during his last twelve (12) months of employment with IBM.

Due to this agreement, Visentin even offered to remain at IBM for a reasonable transition period, but IBM declined that offer. Hewlett-Packard also took steps to avoid any overlap in responsibilities between Visentin's position at IBM and his new position, by insulating Visentin from former IBM customers, restricting his work to segments of its business for which he had not been responsible at IBM, and limiting him to working with established Hewlett-Packard clients.

As you might have guessed, IBM nonetheless instantly brought suit against Visentin alleging breach of the non-compete agreement and misappropriation of trade secrets, and moved for a preliminary injunction.

The Southern District of New York held that the non-competition agreement was overly broad and refused to grant IBM's request for a preliminary injunction. Reiterating the standard under New York law that "properly scoped non-competition agreements are enforceable to protect an employer's legitimate interests so long as they pose no undue hardship on the employee and do not militate against public policy," the Court recognized that while IBM's legitimate business interests were the protection of its confidential information and trade secrets, the agreement prohibited competition in areas where IBM had no legitimate business interests.

Thus, the Court held that IBM had not satisfied its burden of demonstrating that any of its confidential information or trade secrets would be disclosed or relied upon by Visentin as a result of his employment with Hewlett-Packard. According to the Court, Visentin was not a technological expert and was not on the front lines dealing with clients, and therefore had little knowledge of how deals were priced. The Court was also influenced by the fact that there was no evidence of prior wrongdoing or disclosure of confidential information by Visentin. As a result, the Court held that IBM was unable to establish that the non-competition agreement was enforceable under New York law.

Before signing a non-compete agreement, we always recommend that employees have a New York Non-Compete attorney review the agreement to ensure that the employee understands the terms of the agreement and the ramifications of signing it. Lastly, if you already signed a non-compete agreement and now have questions concerning the enforceability of your agreement, it's also smart to consult with a New York employment attorney.

New York Recognizes At-Will Employees' Right to Bring Tortious Interference Claims in Limited Circumstances

Thu, 12 Jan 2012 19:06:53 -0500

New York law does recognize that "the at-will relationship entails certain limited rights, including the right to maintain an action for tortious interference in certain limited situations." Kanhoye v. Altana Inc., 686 F.Supp.2d 199, 214 (E.D.N.Y. 2009).

Under New York law, the elements of tortious interference with a business relationship are: (1) the plaintiff had business relations with a third party; (2) the defendant interfered with those business relations; (3) the defendant acted for a wrongful purpose or used dishonest, unfair, or improper means; and (4) the defendant's acts injured the relationship. RFP LLC v. SCVNGR, Inc., 788 F.Supp.2d 191 (S.D.N.Y. 2011).

In New York, an at-will employee may only maintain an action for tortious interference with the at-will employment relationship against a co-employee by showing that the co-employee acted outside the scope of his or her authority by inducing the employer to terminate. Kanhoye v. Altana Inc., 686 F.Supp.2d 199 (E.D.N.Y. 2009); See Mahmud v. Kaufmann, 607 F.Supp.2d 541 (S.D.N.Y. 2009)(Under New York law, a plaintiff cannot maintain a tortious interference claim against her employer because an employer cannot be liable for interfering with its own relationship with its employee). A supervisor is considered to have acted outside the scope of his employment as would give rise to liability for tortious interference for inducing employer to terminate at-will employee if there is evidence that the supervisor's manner of interference involved independent tortious acts such as fraud or misrepresentations, or that he acted purely from malice or self interest. Kanhoye v. Altana Inc., 686 F.Supp.2d 199 (E.D.N.Y. 2009).

Employee could not circumvent at-will employment rule, namely, that she could freely be discharged at any time with or without cause, by casting her cause of action against her former co-workers and supervisor as one for tortious interference with employment, absent injury independent of termination. Barcellos v. Robbins, 50 A.D.3d 934, 858 N.Y.S.2d 658 (N.Y.A.D. 2 Dept. 2008). Discharged employee's conclusory allegations that her former co-workers and supervisor made "false and malicious" statements in their "libelous" campaign against her, without more, were insufficient to place their actions outside scope of their employment for purposes of stating claim for tortious interference with employment. Id. Inasmuch as the length of employment is not a material term of at-will employment, a party cannot be injured merely by the termination of her employment. Id.

If you believe that someone unlawfully interfered with your employment, it's smart to contact an New York Employment Attorney as soon as possible to preserve all your legal rights.

New York State Court Rules Wage Theft Prevention Act's Liquidated Damages Provision Applies Retroactively

Mon, 05 Dec 2011 13:06:18 -0500

The New York Wage Theft Prevention Act (the "Act"), effective April 2011, amended the New York Labor Law ("NYLL") and increased the liquidated damages penalty for failure to pay wages from 25% of the wages found to be due, to 100% of the wages found to be due.

In Ji v. Belle World Beauty, Inc. (Aug. 24, 2011), nail technicians at a beauty salon sued their employer, alleging that the salon paid them a fixed amount per day regardless of the amount of time worked, refused to permit them to take breaks, and failed to properly compensate them for working overtime. After complaining to management, the salon terminated the Plaintiffs' employment. Although the Plaintiffs were terminated in 2007, they argued that the Act should be applied retroactively, and they should be entitled to recover a 100% liquidated damages award.

The New York Supreme Court (New York's trial court) agreed, holding that: a) the Act was a remedial statute; b) the Act did not impair any vested rights of the employer; and c) the Act did not create any new rights of recovery for the Plaintiffs. Therefore, the Court permitted the Plaintiffs to seek a 100% liquidated damages award for wages that their employer failed to pay before the Act took effect.

However, a few months earlier, in Wicaksono v. XYZ 48 Corp. (May 2, 2011), the Southern District of New York (New York federal court) held that the Act was not retroactive and, therefore, the liquidated damage provision applied only as it existed at the time of the employer's wage violations. In this case, four waiters sued their former employer for wage and hour violations under both the federal Fair Labor Standards Act ("FLSA") and the NYLL. Regarding the Plaintiffs' state law claim, the court held that the enhanced liquidated damages provision of the Act should not be applied retroactively, reasoning that "retroactive operation is not favored by [New York] courts and statutes will not be given such construction unless the language expressly or by necessary implication requires it."

Due to this split between New York state and federal courts in the interpretation of the retroactive effect of the Act, employees alleging violations going back more than three years should consider filing their claims in state court where they can recover 100% liquidated damages going back six years, even where those claims accrued before April 2011.

If you believe that your employer is in violation of the FLSA and/or the NYLL by not properly compensating you, it's important to speak with a New York Wage and Hour attorney to accurately assess and determine all of your legal rights.

New York Private Employers Must Provide All Employees with Annual Notices Between January 1, 2012 and February 1, 2012

Thu, 01 Dec 2011 11:44:44 -0500

On April 12, 2011, the New York Wage Theft Prevention Act ("the Act") became effective, amending the New York Labor Law and increasing penalties for wage and hour violations. See this firm's December 13, 2010 blog entry for further information on the Act.

In addition to the written notice that must be given to all new employees, beginning in 2012, all private sector employers in New York State will also be required to provide each of their New York employees with an annual notice between January 1st and February 1st of each year.

Similar to the notice to new hires, the annual notice must contain the following information:
· The employee's rate(s) of pay;
· The basis of the employee's rate(s) of pay (e.g. by the hour, shift, day, week, salary, piece, commission, or other);
· Whether the employer intends to claim allowances as part of the minimum wage, including tip, meal, or lodging allowances, and the amount of those allowances;
· The employee's regular pay day designated by the employer in accordance with the frequency of pay requirements in the Labor Law;
· The name of the employer and any "doing business as" names used by the employer;
· The physical address of the employer's main office or principal place of business, and a mailing address if different;
· The telephone number of the employer; and
· Any "such other information as the commissioner deems material and necessary."

Employers are required to provide such notice in English and in the "primary language" of the employee, but only if that primary language is one of the languages in which the New York State Department of Labor ("NYSDOL") has prepared such dual-language forms. Currently, the NYSDOL has prepared dual-language forms in Spanish, Chinese, Korean, Russian, Polish, and Haitian-Creole.

Also significant, the Act creates a private right of action for employees to bring a lawsuit for the failure to comply with the amended notice provisions of the Labor Law, which can result in damages of up to $2,500.00, plus costs and attorneys' fees. If you believe that your employer has neglected to provide you with any of the required notices, it's important to consult with a New York Wage and Hour attorney as soon as possible to preserve all your legal rights.

New York Court Finds Non-Compete Agreement to be Unreasonable and Unenforceable

Wed, 16 Nov 2011 13:05:15 -0500

In Eyes of the World, Inc. v. Boci, a New York court recently held that a former employee's restrictive covenant (non-compete agreement) prohibiting her from providing services to any client of her former employer was overly broad and, thus, unenforceable.

In this case, Defendant Boci worked for Plaintiff Eyes of the World, Inc., where she performed hair removal services. As an employee, Boci had signed a non-compete agreement which stated, "For a period of one (1) year following termination of your employment for any reason, you agree not to provide Salon Services in New York City to any client of Eyes of the World, Inc. for whom you provided services during the last twelve (12) months of your employment with Eyes of the World, Inc."

When Defendant Boci voluntarily resigned from her position, and began working for a competitor, Plaintiff sought to enforce the non-compete agreement, alleging that Boci performed services for eighty-six (86) former clients of Plaintiff at Boci's new place of employment within one (1) year of her termination.

The Court stated that, "In order to be enforceable, an anticompetitive covenant ancillary to an employment agreement must be reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the public, and not unreasonably burdensome to the employee. ... Restrictive covenants are generally frowned upon by courts due to public policy considerations that seek to prevent restrictions on a person's livelihood. ... Consequently these covenants will be enforced only if reasonably limited temporally and geographically and then only to the extent necessary to protect the employer from unfair competition which stems from the employee's use or disclosure of trade secrets or confidential customer lists, or if the employee's services are unique or extraordinary."

Here, while Plaintiff attempted to establish that the services provided by Boci were unique and extraordinary, the Court rejected this argument, and found that Boci's skills were not unique or extraordinary, and furthermore, that it appeared clients "opted to follow Boci based on their needs and her ability." In addition, the Court found that there was no evidence that Boci had access to trade secrets, client lists, or proprietary information, ultimately holding that the non-compete clause was "unreasonable in its limitation, burdensome to the employee, and not necessary to protect the employer's legitimate interests."

The Court therefore struck down the restrictive covenant as overly broad and unreasonable, and dismissed Plaintiff's complaint.

Second Circuit Holds that Employer May Have Duty to Accommodate Disabled Employee with Daily Commute

Mon, 14 Nov 2011 15:38:39 -0500

In Nixon-Tinkelman v. New York City Dep't of Health and Mental Hygiene (Aug. 10, 2011), the Second Circuit Court of Appeals held that under the Americans with Disabilities Act ("ADA") and the Rehabilitation Act, employers may be, depending on the circumstances, required to make reasonable accommodations for disabled employees' commute to and from work.

In this case, Plaintiff, who has cancer, heart problems, asthma, and is hearing impaired, brought suit under the ADA and the Rehabilitation Act alleging that Defendant failed to reasonably accommodate her disability. Specifically, following her transfer from Queens to Manhattan, Plaintiff complained about the over-60-minute commute via public transportation, and requested that Defendant accommodate her by transferring her back to an office location closer to her home in Queens. Defendant ultimately denied Plaintiff's request, claiming that commuting was outside of the scope of Plaintiff's job.

Although the Southern District of New York found that activities which "fall outside the scope of the job, like commuting to and from the workplace, are not within the province of an employer's obligations under the ADA and the Rehabilitation Act," on appeal, the Second Circuit explained that certain circumstances may require an employer to provide commuting assistance to a disabled employee, and furthermore, that providing such assistance is not "inherently unreasonable."

While the Second Circuit did not declare that an employer has an absolute legal duty to accommodate the commute of a disabled employee, the Court remanded the case to the Southern District for a determination as to whether the requested accommodations were reasonable. The Court stated that because job performance relies on attendance, Defendant must consider measures that allow the disabled employee to get to and from work, including "transferring her back to Queens or another closer location, allowing her to work from home, or providing a car or parking permit."

The Court noted that Defendant should also "consider factors such as the number of employees employed by [Defendant], the number and location of its offices, whether other available positions existed for which [Plaintiff] showed that she was qualified, whether she could have been shifted to a more convenient office without unduly burdening [Defendant]'s operations, and the reasonableness of allowing her to work without on-site supervision."

If you are a disabled employee and your employer recently denied your request for a reasonable accommodation, it's crucial that you immediately consult with a New York City employment attorney to learn about, and preserve, all your legal rights.

Second Circuit Permits a Collective Action For Violations of the FLSA and a Class Action for Violations of New York Labor Law to Proceed Together in the Same Lawsuit

Fri, 11 Nov 2011 13:48:28 -0500

In Shahriar v. Smith & Wollensky Restaurant Group (September 26, 2011), current and former waiters claimed that Defendant violated both the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL") when it unlawfully required Plaintiffs to share tips with managers and/or employees who did not regularly interact with customers.

Plaintiffs brought their FLSA claims as a collective action and their NYLL claims as a class action under Rule 23 of the Federal Rules of Civil Procedure ("Rule 23"). The district court granted Plaintiffs' motion for class certification of their NYLL claims, and Defendant appealed, claiming there was an inherent conflict between collective actions under the FLSA and class actions under the NYLL because potential plaintiffs must affirmatively opt-in to FLSA collective actions, while FRCP 23 requires plaintiffs to opt-out of class actions.

While Rule 23 does not govern FLSA collective actions, it does govern NYLL class action claims brought in federal court. The primary difference between a Rule 23 class action and an FLSA collective action is the manner in which a class is formed. In order to participate in an FLSA collective action, an employee who is not a named plaintiff must "opt-in" or affirmatively consent to litigation of his or her claims in the named lawsuit. A Rule 23 class action does not require consent of class members. Instead, all members of the class are included as parties to the action unless they "opt- out." To opt-out, a class member must expressly request exclusion and formally withdraw from the lawsuit.

The Second Circuit Court of Appeals upheld the district court's order granting class certification, holding that Plaintiffs could simultaneously maintain a collective action under the FLSA, as well as a class action based on NYLL claims under Rule 23, where the facts underlying both claims "form part of the same case or controversy."

The Court concluded that the "conflict" between an FLSA opt-in case and a NYLL opt-out case was not so compelling as to warrant that they be asserted in separate lawsuits, especially because "an employee fearful of retaliation ... may choose not to assert his or her FLSA rights," but that a "class action under the NYLL allows employees to recover lost wages without the risks attendant to asserting affirmatively an FLSA claim."

If you believe that your employer is violating the FLSA or the NYLL by not properly compensating you, it's important to speak with a New York City wage and hour attorney to assess and determine all of your legal rights.

The Second Circuit Expands Definition of "Adverse Employment Action" In The Context Of FMLA Retaliation Claims

Thu, 10 Nov 2011 14:05:16 -0500

In Millea v. Metro-North Railroad Company (Aug. 8, 2011), the Second Circuit Court of Appeals (Federal Court covering New York) found that a "material adverse employment action" in the context of a Family Medical Leave Act ("FMLA") retaliation claim should be broadly defined to include any action "that is likely to dissuade a reasonable worker in the plaintiff's position from exercising his legal rights."

The Plaintiff, an employee who took intermittent FMLA leave for panic attacks related to post traumatic stress disorder, alleged that his employer retaliated against him for taking FMLA leave by; 1) placing a notice of discipline in his employment file for a year; 2) requiring him to update his FMLA certification; 3) creating a work environment that motivated him to transfer to a lower paying job; 4) delaying approval of his bid for the lead custodian position; and 5) subjecting him to heightened managerial surveillance.

The trial court had instructed the jury that an "adverse employment action" is defined as a "material adverse change" in the employee's terms and conditions of employment, such as "termination, demotion, loss of benefits, or significantly diminished responsibilities." Following these instructions, the jury found that the Plaintiff failed to show that an adverse employment action took place.

However, the Second Circuit disagreed, and held that an adverse employment action within the context of an FMLA retaliation claim was not limited to a material change in the terms and condition of employment, but rather also encompassed any action "that is likely to dissuade a reasonable worker in the plaintiff's position from exercising his legal rights." This means that employees bringing FMLA retaliation claims now have a much lower threshold to meet.

If you believe that your employer retaliated against you for exercising your rights under the FMLA, it's smart to immediately contact a New York City employment attorney to preserve your rights.

New York City Religious Discrimination Law Expands Employer Obligations

Tue, 06 Sep 2011 16:43:12 -0500

Federal anti-discrimination law, the New York State Human Rights Law, and New York City Human Rights Law ("NYCHRL") all protect employees from workplace discrimination based on religious beliefs and practices, and impose an obligation on employers to provide reasonable accommodations for the religious needs and practices of its employees (e.g. for time off to pray or to observe a religious holiday, to wear certain religious garb or symbols, or to accommodate certain dietary restrictions). However, these laws do not require an employer to provide a religious accommodation to its employees if doing so would pose an "undue hardship."

On August 30, 2011, the New York City Workplace Religious Freedom Act was enacted, amending the NYCHRL, and making it more difficult for New York City employers to reject proposed accommodations of employees' religious practices as an "undue hardship." While New York courts have generally interpreted "undue hardship" to mean that employers could deny a religious accommodation request as long as it imposed more than a "de minimus cost or burden" to the employer, the new amendments to the NYCHRL make it clear that a potential accommodation of an employee's religious practice is not an "undue hardship" for the employer unless it requires "significant expense or difficulty."

In addition, the new law identifies factors that should be considered in determining whether an accommodation "constitutes an undue economic hardship," including:

The identifiable cost of the accommodation in relation to the size and operating costs of the employer. This includes the cost of lost productivity and of retaining or hiring employees or transferring employees from one facility to another.
The number of individuals who will need the particular accommodation.
For employers with multiple facilities, the degree to which the geographic separateness or administrative or fiscal relationship of the facilities will make the accommodation more difficult or expensive.

However, the new law also provides that an accommodation would constitute an "undue hardship" if it would result in the inability of an employee to perform the essential functions of his or her position, if it significantly interferes with the safe or efficient operation of the workplace, or if it violates a bona fide seniority system.

All New York City employers must therefore be extremely careful if they are going to deny an employee's request for a religious accommodation due to it being an "undue hardship."

If you are an employee who feels that your employer has violated the NYC Human Rights Law by arbitrarily denying your request for a religious accommodation, it's always smart to immediately consult with a New York City employment attorney to preserve your legal rights.

New York State Court Finds Employer Liable for Breaching Employment Agreement

Fri, 19 Aug 2011 17:38:53 -0500

In Kleinman v. Blue Ridge Foods, LLC (July 7, 2011), the Kings County Supreme Court granted an employee's motion for summary judgment on his breach of contract claims against his former employer.

In this case, pursuant to the terms of an employment agreement, Defendants hired Plaintiff as their Chief Executive Officer for a term of three (3) years. If Defendants wanted to discharge Plaintiff earlier, a prior written notice must be delivered to Plaintiff either personally or by mail. In addition, in the event Plaintiff's early discharge was without "cause," Plaintiff would be entitled to additional benefits, including a severance payment equal to twelve (12) months' salary.

After only four (4) months, with no prior written notice, Defendants abruptly discharged Plaintiff's employment. His discharge was communicated to him both verbally and in writing on that day.

Plaintiff then sued, asserting that, in accordance with his employment contract, since his discharge was without "cause," he was owed the severance and additional benefits.

While Defendants basically conceded that they failed to meet any of the "for cause" discharge provisions provided for in the agreement, they instead contended that Plaintiff could not recover the compensation he sought because the employment contract was unenforceable. Defendants claimed that Plaintiff defrauded them by misstating his work experience and "was in completely over his head and was at no time able to perform the job for which he was hired." They argued that the employment contract was thus void and unenforceable because they were induced to enter into it by Plaintiff's fraudulent misrepresentations as to his title and experience at his prior employment.

However, the court held that Defendants failed to establish a justifiable reliance on the purported misrepresentations, and noted a crucial factor was that Defendants failed to adequately verify Plaintiff's experience even though the means to do so were at their disposal.

The court thus ruled that Defendants terminated Plaintiff without "cause," as that term is defined in his employment contract. Further, the court found that Defendants breached the employment contract, as they failed to provide Plaintiff with the contractual notice and cure period. Therefore, the court held that Plaintiff was entitled to his actual damages, interest, attorney's fees, and costs under Section 198 and other provisions of Labor Law article 6, and the statutory liquidated damages under Labor Law § 198.

If you believe that your former employer has breached an employment agreement with you, it's always smart to immediately consult with a New York employment agreement attorney to preserve your legal rights.

Southern District of New York Grants Conditional Certification Under the FLSA, But Denies Certification of State Law Claims Under Rule 23

Tue, 09 Aug 2011 11:15:17 -0500

On April 29, 2011, in Cortes v. Foot Locker, Inc.pdf, the Southern District of New York denied, for the second time, Plaintiffs' motion for class certification of their New York State Labor Law ("NYSLL") claims pursuant to Rule 23 of the Federal Rule of Civil Procedure ("Rule 23").

In this case, Plaintiffs sued their employer alleging that the store managers continually altered their time sheets to decrease hours and thus meet corporate quotas. In January 2010, the Court conditionally certified the case as an opt-in collective action under the Fair Labor Standards Act ("FLSA"), but denied Plaintiffs' motion to certify their NYSLL claims as an opt-out class, pursuant to Rule 23.

While Rule 23 does not govern FLSA collective actions, it does govern NYSLL class action claims brought in federal court. The primary difference between a Rule 23 class action and an FLSA collective action is the manner in which a class is formed. In order to participate in an FLSA collective action, an employee who is not a named plaintiff must "opt-in" or affirmatively consent to litigation of his or her claims in the named lawsuit. A Rule 23 class action does not require consent of class members. Instead, all members of the class are included as parties to the action unless they "opt- out." To opt-out, a class member must expressly request exclusion and formally withdraw from the lawsuit. In addition, while the FLSA's statute of limitations is only two years (three years for "willful" violations), the NYSLL has a six-year statute of limitations.

When the Court conditionally certified the FLSA opt-in collective action, it permitted Plaintiffs to take discovery beyond the FLSA's statute of limitations and gave them permission to renew their motion for Rule 23 class certification only if they uncovered evidence showing that the Defendant had committed violations outside of the FLSA's statute of limitations.

However, after discovery, when Plaintiffs did in fact renew their motion, the Court renewed its denial of the Rule 23 certification, stating that, "certifying a Rule 23 class as to plaintiffs' state-law claims would lead to a significant expansion of the scope of fact discovery, which, in turn, would likely substantially delay trial on plaintiffs' claims arising under the [FLSA] . . . If an opt-out class were certified on the New York state labor law claims, the proofs on those claims would potentially overshadow and overwhelm the claims that arise under federal law, as to which I have already certified an opt-in collective action."

Unfortunately, this is not the first time that a court stressed the incompatibility of certifying a collective action under the FLSA and certifying a class action under Rule 23 in the same case. As such, it's so important for all New York employees to first consult with a New York wage and hour attorney before initiating a lawsuit for unpaid wages.

New York Federal Court Rules That Separation Agreement Did Not Violate the ADEA

Mon, 08 Aug 2011 15:02:05 -0500

On July 11, 2011, in Ridinger v. Dow Jones & Co Inc., the Second Circuit ruled that a 62-year-old employee's age discrimination claim brought under the Age Discrimination in Employment Act ("ADEA") was barred due to a valid separation agreement that the employee had signed.

In his separation agreement, the employee agreed to waive and release all claims up to the point of his termination, explicitly including those claims for discrimination under the ADEA. Despite signing it and accepting all the benefits of the severance package, the employee nonetheless sued for discrimination, arguing that the release was invalid because it violated the Older Workers Benefit Protection Act ("OWBPA"), which requires that an employee waive his or her ADEA claim in a "knowing and voluntary" way and that a separation agreement be "written in a manner calculated to be understood."

The employee also argued that the waiver provision violated Equal Employment Opportunity Commission ("EEOC") regulations, which require a waiver to be drafted in plain language, not using "technical jargon" or "long, complex sentences," and "geared to the level of understanding" of the employee, taking into consideration the typical employee's education level.

The Second Circuit rejected the employee's arguments and held that the separation agreement was in fact enforceable, as it was written by the employer in a "manner calculated to be understood" by the relevant employees. Comparing the language in this agreement to those found in cases in which the court invalidated a company's separation agreement, the Court found that the terms in this separation agreement were sufficiently clear and complied with the OWBPA.

This decision should serve as a reminder to all employers of the importance of drafting separation agreements in a clear manner using plain language. In addition, if you signed a severance or separation agreement as an employee, it's always smart to have a New York Severance Agreement attorney review the agreement, especially if it includes provisions related to age discrimination.

New York State Court Enforces Restrictive Covenant in Physicians' Employment Agreements

Fri, 29 Jul 2011 13:21:39 -0500

On June 1, 2011, in Peconic Surgical Group, P.C. v. Cervone, the New York State Supreme Court, Suffolk County, granted a medical group's motion for a preliminary injunction and temporary restraining order enforcing a restrictive covenant (non-compete clause) contained in two (2) physicians' employment agreements.

The plaintiff, Peconic Surgical Group, P.C. ("PSG"), is a medical group consisting of surgeons. Before joining PSG, the defendant surgeons signed employment agreements with PSG, in which they agreed that, for a period of three (3) years after leaving PSG, they would not engage in the practice of surgery within fifteen (15) miles of PSG's office.

After both defendant surgeons resigned from their positions, PSG brought suit alleging that the surgeons violated the restrictive covenant by opening an office approximately three (3) miles from PSG's office.

As the court noted, when enforcing "restrictive covenants among professionals, great weight is given to the interests of the employer in restricting competition within a confined geographic area. The rationale therefor is that professionals are deemed to provide unique or extraordinary services. In fact, the interests of the employer have enjoyed solicitous consideration by the courts when the restrictive covenant is in an employment agreement between doctors."

Using this rationale, the court held that the three-year, fifteen-mile restriction on the surgeons' practice was reasonable in time, geographic area, and scope. Also, because the geographic area in question was served by several hospitals, the court found that that enforcement of the restrictive covenant was not harmful to the public.

The court then stated that PSG "has demonstrated a strong probability of irreparable harm if the preliminary injunction were denied. Not only would PSG lose the investment it made in hiring the defendants and establishing the practice for which they were hired, a loss that is not readily compensated by money damages, it would also lose patients and revenues to [defendants'] new practice, as well as the goodwill associated with the practice, which is difficult to quantify."

This decision reinforces the need to weigh the availability of professional services in a given area when determining the enforceability of a non-compete agreement.

Before signing a non-compete agreement, we always recommend that employees have a New York non-compete attorney review the agreement to ensure that the employee understands the terms of the agreement and the ramifications of signing it.

New York Federal Court Decertifies FLSA Class-Action Lawsuit

Sun, 05 Jun 2011 16:02:05 -0500

On May 12, 2011, in Zivali v. AT&T Mobility, the Southern District of New York decertified an FLSA class because the plaintiffs were unable to demonstrate a class-wide illegal policy or practice. The court found that the plaintiffs were not "similarly situated" for purposes of a FLSA collective action, and dismissed all of the claims except those of the original plaintiff.

To give some background on procedure, New York federal courts generally use a two-step procedure when dealing with FLSA collective actions. "In the first step, the court authorizes plaintiffs to send out notices to potential opt-in plaintiffs who may be similarly situated to the named plaintiffs with respect to the FLSA violation alleged." Capsolas v. Pasta Resources, Inc., 2011 WL 1770827, 2 (S.D.N.Y. 2011). The burden for demonstrating that potential plaintiffs are "similarly situated" is very low at the notice stage. A plaintiff need make only a "modest factual showing" that he and potential collective action members were victims of "a common policy or plan that violated the law."

The second stage, called the "decertification stage," typically takes place after discovery has been completed and after the defendant has filed a motion for decertification. This second and more stringent review of the "similarly situated" standard is undertaken to ensure that having the case proceed to trial as a collective action, as opposed to individual actions, is appropriate. See Indergit v. Rite Aid Corp., 2010 WL 2465488 (S.D.N.Y. 2010).

In Zivali, the plaintiff, a nonexempt retail employee, alleged that AT&T failed to pay wages and overtime compensation, in violation of the FLSA and the New York Labor Law. He specifically claimed that needing supervisor approval for overtime, having to work through meal periods, and having to work "off-the-clock" made it difficult to capture all of his hours in the company's electronic time-keeping system.

In 2009, applying the lower standard, the court "conditionally" certified the class of all similar employees nationwide. After notices were sent out, over 4,100 plaintiffs ultimately opted into the lawsuit. Following discovery, AT&T made a motion for decertification.

In it's May 12, 2011 decision, applying the higher, second-stage standard, the court decertified the class, holding that the company's policies and electronic time-keeping system were "lawful under the FLSA, and plaintiffs have failed to show that these lawful policies are consistently violated in practice such that it would be possible to generalize across the 4,100 opt-in plaintiffs in this case." The court found that each employee's situation was different, depending upon the specific manager and location. Because there was no overarching policy that violated the FLSA, the court held that "resolution of the many fact-specific issues in this case would essentially require 4,100 mini-trials . . . Such a result is the antithesis of collective action treatment and would overwhelm the judicial system and eliminate any judicial efficiency that might be gained."

If you believe that you're not being properly compensated for all your time, it's important to speak with a New York wage and hour attorney to determine whether your employer's wage and/or overtime policy violates the law.

NLRB Sues New York Non-Union Employer For Terminating Employees After They Complained About Working Conditions on Facebook

Fri, 03 Jun 2011 17:46:56 -0500

On May 9, 2011, The National Labor Relations Board ("NLRB") issued a complaint alleging that Hispanics United of Buffalo, Inc., a New York non-profit organization that provides social services to low-income clients, unlawfully discharged five employees after they complained about their working conditions in a Facebook discussion.

In this case, an employee was scheduled to meet with management to discuss working conditions. The day before the meeting, the employee posted on her personal Facebook page a comment by a co-worker that employees were not doing enough to help the organization's clients. Other employees posted comments, in which they defended their performance, and criticized working conditions, staff levels and workloads. When the employer learned of the postings, it fired the five employees who made the comments on the basis that their comments constituted harassment of the co-worker originally mentioned in the post.

However, the NLRB alleges that the Facebook discussion among coworkers, addressing working conditions like performance and staffing, constituted protected concerted activity within the meaning of Section 7 of the National Labor Relations Act ("NLRA") because it involved a conversation among co-workers about their terms and conditions of employment. The NLRA provides that "employees shall have the right . . . to engage in . . . concerted activities for the purpose of . . . mutual aid or protection." 29 U.S.C. § 157.

It is well established that the NLRA's protection extends beyond the context of labor unions. Speech of an individual employee is "concerted" as long as it is engaged in with the object of initiating or inducing group action. N.L.R.B. v. Caval Tool Div., 262 F.3d 184 (2d Cir. 2001). When an individual expresses dissatisfaction with terms and condition of employment in front of his fellow employees, "the object of inducing group action need not be express." Timekeeping Sys., Inc., 323 NLRB 244, 247 (1997).

The courts and the NLRB have repeatedly found that individuals who challenge working conditions through online conversations are engaged in concerted activity. In Care Ambulance Service Inc. and Elizabeth Tello, an Individual, 2007 WL 3070947 (2007), two employees were exchanging email messages that involved shared concerns about working conditions, including their concern that other employees were receiving preferential treatment from management. The NLRB found that because the employees' "were voicing their concerns for the purpose of mutual aid or protection activity," the email exchange fell comfortably within the definition of concerted activity.

In American Postal Workers Union and Cheryl Alves, an Individual, 2006 WL 2559848 (2006), another case involving conversations online, the NLRB found that the purpose of the employees' emails was to express their concerns that they, as field employees, were being treated differently than headquarters employees. Since the employees' online activity directly related to their conditions of employment, it also constituted protected concerted activity under the NLRA.

If you believe that your employer retaliated against you for engaging in some "concerted activity," it's smart to immediately contact a New York employment attorney to preserve your rights.