Welcome to Legal Briefs for HR! This update is sent to more than 3600 HR professionals, in-house counsel, business owners and others who like to stay up on employment issues, or just like to mutter "What were they thinking?" Anyone is welcome to join . . . just email me to be added (or removed) from the list. Missed one? No worries. Past issues are posted on my firm's website at www.munckcarter.com under E-Newsletter.

If you think the presidential candidates are into "change" check out what's impacting you in the wild world of labor and employment law:

•1. Rocket Man - Contra to the persistent myth that it's not possible to have an enforceable noncompete in Texas, a recent court of appeals case in Dallas provides a good refresher on how it can be done. The employer who sought an injunction against his former employee lost because [1] the noncompete was signed years after the employee was hired; [2] the agreement containing the noncompete said the consideration provided by the employer was letting the employee keep his job (which, by the way, was flying around at shows with a rocket pack on his back); and [3] the employer failed to provide the kind of consideration (e.g., access to new trade secrets) that would've been proper and supported the noncompete. The fact that the employee had been privy to all kinds of cool proprietary information before he signed the noncompete didn't help the employer, because that was not new consideration at the time the noncompete was signed. Powerhouse Productions v, Scott (Ct. App - Dallas 8-8-08) Lesson? You can have enforceable noncompetes in TX, even when imposed "midstream" on an existing employee, but you must cite to and actually give new and the right kind of consideration (and the post-employment restrictions on the employee must be reasonable in scope). Form agreements are a sorry substitute for assessing each case on its merits, so take the time to do it right!

•2. California Dreamin' - Want to impose and enforce a noncompete in CA? You're dreaming, dudes and dudettes! The CA Supreme Court affirmed what we already knew from reading the statute . . . "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void" with narrow exceptions for agreements entered into as part of the sale or dissolution of a business. The Court went a step further and also found that requiring a former employee to get a release of an invalid agreement is unlawful interference with the employee's rights. Edwards v. Arthur Andersen LLP (Cal. 8-7-08)

•3. Fair WARNing - Another state has enacted a plant closing notice requirement that is more stringent than the federal standard. Unlike the federal Worker Adjustment and Retraining Notice Act, that requires 60 days notice to affected employees and certain state/local government officials, the NY version calls for 90 days. If the tough economy has you contemplating reductions in staff and/or shuttering facilities, you must look into the applicability of federal, state and even local notice requirements. For a copy of the enacted bill, go to http://public.leginfo.state.ny.us/menuf.cgi and put S08212 in the bill number box.

•4. Search Me - Looking for a way to shore up your "no expectation of privacy" disclaimer on employees' computer use? Where an employee had to read a privacy disclaimer and click on the words "I agree" as a condition to logging on to the system each day, a court recently held that the employee had no reasonable expectation of privacy and it was OK for his employer to search his office computer. The disclaimer stated that the computer could be monitored, read, copied or disclosed and users had no expectation of privacy. United States v. Mosby (E.D. Va. 7-25-08). Be aware, however, that some states' laws require much more detailed notice of monitoring before employers can snoop.

•5. E-Verify in Your Future? - Yes, if Congress has its way. Two bills were introduced to change the currently voluntary system (which checks employee eligibility to work in the U.S.) into a mandatory system. H.R. 6789 would apply to large employers (more than 250 ees) one year after the bill becomes law. Those with 100 to 250 ees would have two years to start using E-Verify on all existing ees and new hires. Those with 30 to 99 would have three years and everyone else has four years to comply. The bill also beefs up fines for noncompliance from the current range of $250 to $5000 to a proposed range of $2500 to $40,000. The other bill (H.R. 6782) allows six years to phase in all employers. You can always read full text and check the status of pending bills at http://thomas.loc.gov. As an aside, E-Verify was to expire for lack of funding in two months, but a five-year extension has been approved by the House. The plan is to extend the life of the program in order to provide some breathing room to fix it.

•6. They Punted (Again) - This month, the OFCCP issued amended interim guidance on the issue of which race/ethnic categories to use when federal government contractors prepare their affirmative action plans (AAPs). First, a little history. Until 2007, the same five categories (i.e., White, Black, Hispanic, Asian/Pacific Islander and American Indian/Alaskan Native) were used on annual EEO-1 reports and AAPs. Beginning with the 2007 EEO-1 report, the Asian/Pacific Islander group was changed to two groups, Asian and Native Hawaiian and Other Pacific Islanders. Also a new group, Two or More Races, was added. Employers who prepared both types of reports wondered if they should stick with the old or ring in the new, when preparing AAPs, starting in 2007. The OFFCP issued initial guidance, to say they were thinking about syncing their race/ethnic categories with ones used on the EEO-1. The amended guidance says they are still thinking about it . . . but it's OK for employers to use either set. Maybe three's a charm? As an aside, your EEO-1 reports are due September 30! Go to www.eeoc.gov and scroll down to "Employers & EEOC" then click on "Surveys: EEO-1, 3, 4 and 5" for more info.

•7. Heads Up, Payroll People - A new law in Iowa (eff. 7-1-08) prohibits employers from mailing paychecks to employees unless they have the employee's written consent to do so. This restriction does not apply to paycheck info provided in tandem with a direct deposit of funds. Also, employers are liable for any overdraft fees incurred by their workers if wages are not paid on or before regularly scheduled paydays. A copy of the enrolled bill is at http://www.legis.state.ia.us/GA/82GA/Session.2/Affected/08enroll.htm and scroll down to SF 2222.

•8. Nice Try - You'll be relieved to hear that registration as a sex offender in the State of Texas is not a protected disability under the Americans With Disabilities Act. Vlasek v. Wal-Mart Stores, Inc. (S.D. Tex. 7-22-08). This was one of several claims made by a female manager, after her status as a registered sex offender was discovered and her employment ended. Her argument that local managers knew and told her it wouldn't affect her job did not support a wrongful discharge claim, since she was employed at-will and local management did not have the authority to change that status. Some states (e.g., IN) have laws which specifically authorize discharge from employment of certain types of sex offenders whose jobs involve contact with children. A few take-aways are [1] make sure your at-will disclaimers are strong; [2] the authority to negate at-will status should be granted to very few; and [3] periodically retrain your managers to understand their role in upholding at-will status and not creating unfortunate oral or implied contracts.

•9. Dumbo Deletions - Employees who left to form a new company after deleting customer lists and other proprietary information on their former employer's computers are wishing they weren't so tidy (or mean). Their motion to dismiss the employer's Computer Fraud and Abuse Act claim against them was dismissed. The CFAA prohibits "knowingly causing the transmission of a program, information code, or command, and as a result of such conduct, intentionally causing damage without authorization, to a protected computer." Courts differ on whether there is a CFAA violation when the employee was authorized to access the info, as part of his or her job. Some say "no foul" while others say such authorization ends as soon as the employee's interests becomes adverse to the employers (e.g., hatching a new, competing business). This court held that deleting the data brought it within the ambit of legal precedent (the Citrin case, discussed in LB4HR #3-2006) that sided with the latter point of view. Alliance International Inc. v. Todd (E.D.N.C. 7-22-08).

•10. Military Matters - H.R. 6225, if passed, will change language in the Uniformed Services Employment and Reemployment Rights Act (USERRA) to require (rather than merely allow) courts to grant injunctive relief, given the proper circumstances, to aggrieved military personnel. The bill would also extend the life of the Servicemembers Civil Relief Act (SCRA) which allows deployed military personnel to suspend or end service contracts, without penalty, and requires creditors to reduce interest rates.

•11. Fun With FMLA - Yours truly looks forward to speaking at the September 11 meeting of the DFW ISCEBS chapter on the topic of pending changes to the FMLA regulations. For more info on ISCEBS and this presentation, go to www.dfwiscebs.org.

Until next time,

Audrey E. Mross

Labor & Employment Attorney

Munck Carter P.C.

600 Banner Place

12770 Coit Road

Dallas, TX 75251

972.628.3661 (direct)

972.628.3616 (fax)

214.868.3033 (cell)

amross@munckcarter.com

www.munckcarter.com

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