Continued Employment Is
Sufficient Consideration For A Non-Competition Agreement
By Vincent J. Tersigni, Esq.
Resolving a split among the lower courts in Ohio, the
Supreme Court of Ohio held on March 10, 2004 that
continued employment by an at-will employee constitutes
sufficient consideration for a non-competition agreement
with the employer. The Court’s 4-3 opinion in Lake
Land Employment Group of Akron, LLC v. Columber
(2004), 101 Ohio St.3d 242, reversed a decision of the
Summit County Court of Appeals.
In Lake Land, the Supreme Court reaffirmed its
prior holdings that it will not weigh the sufficiency of
the consideration provided by an employer for such an
agreement, as long as some consideration, either in the
form of a detriment to the promisee or benefit to the
promisor, is provided.
The Court also affirmed its prior holdings that: (1) a
covenant not to compete which imposes unreasonable
restrictions upon an employee will only be enforced to the
extent necessary to protect an employer’s legitimate
interest; and (2) a covenant restraining an employee from
competing with his former employer upon termination of
employment is reasonable if the restraint is no greater
than is required for the protection of the employer, does
not impose undue hardship on the employee, and is not
injurious to the public.
Based on the foregoing, it is clear that Ohio employers do
not need to provide any additional benefit to at-will
employees, other than continued employment, in order to
provide adequate consideration for a non-competition
agreement. However, Ohio courts will still maintain the
discretion to limit enforcement of the agreements to the
extent that they are reasonable.
Vincent Tersigni
is a Shareholder and the Employment Law Practice Group
Leader. He can be reached at
vtersigni@bdblaw.com
or
330.258.6552.
New Ohio Concealed
Weapons Law Impacts Employers
By
Ashley M. Manfull, Esq.
On January 8, 2003, Governor Taft signed House Bill 12,
making Ohio one of 46 states with a “concealed carry”
law. The law, which took effect on April 7, 2004,
authorizes county sheriffs to issue licenses to
individuals who seek to carry a concealed handgun.
In order to obtain a license, an individual must pay a
fee, provide a color photograph, and complete an
application form, complete a 12-hour firearm training
course, and submit to fingerprinting and a background
check. Once an individual is licensed to carry a
concealed weapon, he or she can carry the weapon onto most
public and private premises, unless specifically
prohibited under the law or specifically prohibited by the
premises owner. For example, the law specifically
prohibits concealed weapons in courthouses and law
enforcement buildings, school safety zones, churches,
synagogues, mosques, and child daycare centers.
While the law does not prohibit individuals from carrying
concealed weapons onto the premises of an employer,
employers are not without recourse. The law specifically
provides that it will not interfere with or override a
rule, policy, or practice of a private employer
prohibiting the presence of firearms on the employer’s
premises or property. The law also allows an employer to
adopt a rule, policy or practice that prohibits the
carrying of handguns in private motor vehicles owned by
the employer. Employers should include a detailed
concealed weapons policy in their employee handbook.
In addition to adopting a policy or practice with respect
to employees, the law allows an employer to prohibit
licensees (such as guests, clients or visitors) from
carrying a concealed weapon onto the employer’s premises.
To restrict licensees from carrying concealed weapons onto
the premises, employers must post a sign in a conspicuous
location indicating that entrants are prohibited from
carrying weapons onto the premises. Signs should be
posted at all entrances to buildings and parking lots. If
a sign is posted and a licensee knowingly enters the
premises with a concealed weapon, he or she is guilty of
criminal trespass.
Finally, the law also provides civil liability immunity to
private employers for any injury, loss to property, or
death allegedly caused by or related to a licensee
bringing a handgun onto the private employer’s premises or
property, unless the private employer acted with a
malicious purpose.
For more information about Ohio’s concealed carry law, and
for additional guidance on preparing handbook policies and
posting notices, please contact
any of the attorneys in the Employment Law Practice
Group.
Ashley
Manfull is an Associate attorney in our
Employment Law Practice Group. She can be reached at
amanfull@bdblaw.com
or
330.258.6437.
Age Discrimination,
Revisited: The United States Supreme Court
Narrows, and the Ohio
Supreme Court Expands Age
Discrimination Claims
By Jan E. Hensel, Esq.
 In
two important decisions interpreting who may file suit
under the state and federal laws which prohibit age
discrimination in employment, the United States Supreme
Court narrowed the scope of employees who are protected by
the Age Discrimination in Employment Act (“ADEA”), and the
Ohio Supreme Court broadened the scope of protection
against age discrimination under the analogous Ohio
statute.
In General Dynamics Land Systems Inc. v. Cline, the
United States Supreme Court held that the ADEA does
not forbid employers from favoring much older workers over
merely older workers--those over the age of 40--when both
are protected by the statute. In Coryell v. Bank One
Trust Company, the Ohio Supreme Court held that an
employee does not have to establish that he or she was
replaced by an individual under the age of 40 to state a
claim of age discrimination, but only that the replacement
employee is “substantially younger” than the employee
claiming discrimination.
Cline involved a challenge to a provision of a
collective bargaining agreement between General Dynamics
Land Systems, Inc. and the United Auto Workers union which
eliminated the company’s obligation to provide health
benefits to future retirees, except those employees who
were currently over the age of 50. The Cline
plaintiffs were employees over the age of 40 who were
adversely affected by the agreement. They filed suit
under the ADEA, which prohibits workplace discrimination
“against any individual with respect to his compensation,
terms, conditions or privileges of employment because of
such individual’s age.” The plaintiffs argued that their
claim was supported by both the plain language of the
statute and an Equal Employment Opportunity Commission
regulation that define the class of employees protected by
the statue as “individuals 40 and over”. Thus, the
Plaintiffs’ argument was that the ADEA protects any
employee over the age of 40 from employment decisions
based on their age, even if the decision favored the older
worker over the younger.
The Supreme Court rejected the plaintiffs’ argument,
however, and held that the statute forbids discriminatory
preference for the young over the old. It does not,
however, prohibit preference for the old over the
young--even when the “young” fall within the definition of
those protected by the statute.
The week after the U.S. Supreme Court issued its decision
in Cline, the Ohio Supreme Court expanded the scope
of the Ohio statute which prohibits age employment
discrimination in employment. Similar to the ADEA, the
Ohio statute forbids discrimination in employment of any
person over the age of 40 because of that individual’s
age. In Coryell v. Bank One Trust Company, the
Ohio Supreme Court held that an employee states a prima
facie case of age discrimination under R.C. § 4112.02 by
demonstrating that he or she (1) was a member of the age
protected class, (2) was discharged, (3) was qualified for
the position, and (4) was replaced by, or the discharge
permitted the retention of, a substantially younger
person.
Prior to the Coryell decision, Ohio law required an
employee to establish that he or she was replaced by a
person outside the protected class--under the age of
40--to qualify for protection under Ohio’s age
discrimination statute. Mr. Coryell alleged that he, a 49
year old, was discriminated against because of his age
when he was fired and replaced by a 42 year old. The
Supreme Court held that Mr. Coryell had established a
prima facie case of age discrimination by his allegation
that he was replaced by a “substantially younger” employee
even though the replacement employee was over the age of
40.
In reaching its decision, the Court adopted the U.S.
Supreme Court’s interpretation of the ADEA, which also
requires only that the employee establish that he or she
was replaced by a substantially younger individual. The
Ohio Supreme Court declined to define how much age
difference is required to satisfy the “substantially
younger” test, instead stating that the substantially
younger element must be determined on a case by case
basis.
The two decisions are consistent in their primary theme:
that the purpose of age discrimination statutes is to
protect older employees from discrimination in favor of
younger employees. Both Courts utilized a common sense
interpretation of the statutory language to effectuate
this statutory intent.
Jan Hensel is a
Shareholder in our Employment Law Practice Group. She can
be contacted at
jhensel@bdblaw.com
or
614.227.4267.
New Proposed COBRA
Regulations Have Been Issued By The
Department of Labor
By
Lisa M. deFilippis, Esq.
 The U.S. Department of Labor (“DOL”) recently issued
proposed regulations to amend the notice requirements
under COBRA. While the proposed regulations do not yet
have an effective date, they are anticipated to be final
in “early” 2004. Group health plans will have six months
thereafter to implement the changes, however, the proposed
regulations provide that, effective immediately, the
continued use of the Department’s model general notice
form from 1986 would no longer constitute a good faith
compliance with COBRA’s notice requirements. While the
Department of Labor has stated that until the final rules
are issued, use of the new model notices is desirable but
not required, group health plans should begin using the
new DOL model notices as soon as possible. A copy of the
model notices, along with an explanation of the changes,
can be obtained from the DOL’s website at
www.dol.gov.
Under the proposed regulations, general notice of COBRA
rights must be provided to covered employees and qualified
beneficiaries, notifying them of their right to COBRA
coverage, within the 90 days after their initial coverage
under the plan begins. The proposed regulations confirm
that the practice of including the general notice in the
plan’s summary plan description (SPD) is acceptable,
however, this method of providing notice will only be
effective if the plan administrator provides the SPD to
both the covered employees and their spouses.
Notices of qualifying events, such as the employee’s
termination of employment, reduction in hours, or another
event leading to the loss of coverage, must be provided by
the employer to the plan administrator within 30 days of
the qualifying event.
Covered employees or qualified beneficiaries are
responsible for notifying the plan administrator of
qualifying events within their knowledge, such as divorce,
legal separation, a dependent’s loss of eligibility, or
the occurrence of a second qualifying event, within 60
days of the qualifying event. If the covered employees or
their qualified beneficiaries fail to notify the plan
administrator within 60 days of these events, the plan
administrator is not required to offer COBRA coverage.
However, the proposed regulations would require a plan to
establish “reasonable procedures” for covered employees
and their qualified beneficiaries to furnish these
notices. Generally, procedures will be considered
reasonable if they are described in the plan’s SPD, and
satisfy certain other requirements.
Within 14 days after the plan administrator receives
notice of a qualifying event, the plan administrator must
notify each covered employee or qualified beneficiary of
their entitlement to elect continuation coverage under
COBRA. Where the employer is also the plan administrator,
the employer generally has 44 days from the date of the
qualifying event to provide the COBRA election notice.
The proposed regulations would establish two additional
notice requirements for plan administrators. The first
would apply where the covered employee or qualified
beneficiary is obligated to notify the plan administrator
of a qualifying event and the plan administrator
determines that the individual is not entitled to COBRA
coverage. The plan administrator would be required to
notify the individual of that determination within 14 days
and provide an explanation of the determination.
The second notice would be required when a plan
administrator terminates a qualified beneficiary’s COBRA
coverage (for example, if the qualified beneficiary failed
to pay COBRA premiums). The plan administrator would be
required to notify the qualified beneficiary “as soon as
practicable,” and would have to explain the reason for the
termination of coverage and any other rights that the
qualified beneficiary might have under the plan.
The proposed regulations clarify that the plan’s SPD
should contain the plan’s COBRA procedures and a summary
of the qualified beneficiary’s right to COBRA coverage.
Also, the SPD must include the ability to elect COBRA
coverage under the Trade Act of 2002.
Employers and plan administrators should take the
following actions:
·
Initiate discussions with COBRA service
providers and review
service agreements
·
Revise initial and qualifying event COBRA
notices
·
Update SPD’s and health plan procedures
·
Create new notices for specific COBRA
situations
Lisa deFilippis
is a Partner in our Business Law and Taxation &
Employee Benefits Practice Groups. She can be contacted
at
ldefilippis@bdblaw.com or
216.615.7345.
Recent Amendments To
The Fair Credit Reporting Act Reduce
Disclosure Obligation
Of Employers And Alter The Statute Of
Limitations In Favor
Of Employers
By
L.A. Perkins, Esq.
 Employers that use background checks (also known as
“consumer reports”) when they hire new employees, or
evaluate current employees for promotion, reassignment
or retention, must comply with the Fair Credit Reporting
Act (“FCRA”). On December 4, 2003, President Bush
signed the Fair and Accurate Credit Transaction Act of
2003 which amends the FCRA by, among other things,
reducing the legal obligations of employers where an
employer takes adverse action against an employee based
on certain communications relating to investigations and
altering the statute of limitations for actions brought
under the FCRA in favor of employers.
Prior to the recent amendment, when an employer took any
type of adverse action against a job applicant or
employee based upon a background check report, the FCRA
required the employer to provide the job applicant or
employee with the source of the information. Effective
March 31, 2004, an amendment to the FCRA carves out an
exception to an employer’s obligation to disclose the
source of the information when an employer takes adverse
action against a job applicant or employee.
Specifically, the amendment (i.e., 15 U.S.C. §1681a(x))
provides that an employer is not required to disclose
the source of the information when an employer takes
adverse action against a job applicant or employee based
on a
employer in connection with an investigation of
(A) suspected misconduct relating to employment; or
(B) compliance with Federal, State, or local laws and
regulations, the rules of a self-regulatory organization
or any preexisting written policies of the employer;
[and]
(C) the communication is not made for the purpose of
investigating a consumer’s credit worthiness, credit
standing, or credit capacity; and
(D) the communication is not provided to any person
except
(i) to the employer or an agent of the
employer;
(ii) to any Federal or State officer, agency,
or department, or any officer, agency, or department of
a unit of general local government;
(iii) to any self-regulatory organization with
regulatory authority over the activities of the employer
or employee;
(iv) as otherwise provided by law; or
(v) [to a governmental agency].
Instead, the employer is required to disclose to the job
applicant or employee a summary of the communication
upon which the adverse action is based.
If an employer fails to comply with the requirements set
forth in the FCRA, the employer subjects itself to
liability for monetary damages, including attorneys’
fees and possibly punitive damages. Prior to the recent
amendment, an employer’s exposure to having an action
filed against it was much greater because the statute of
limitations allowed a job applicant or employee to bring
a cause of action against an employer within two years
after he/she discovered that the employer
materially and willfully misrepresented any information
required under the FCRA to be disclosed provided the
information so misrepresented is material to the
establishment of the employer’s liability.
Effective March 31, 2004, the FCRA now requires that a
job applicant or employee bring an action under the FCRA
“not later than the earlier of - (1) 2 years after the
date of discovery by the plaintiff of the violation that
is the basis for such liability; or (2) 5 years after
the date on which the violation that is the basis for
such liability occurs.” See 15 U.S.C. §1681p.
Accordingly, employers now have only a five (5) year
period of exposure for actions brought under the FCRA as
opposed to essentially an indefinite period of exposure.
L.A. Perkins is an Associate in our
Employment Law,
Litigation, and Real Estate & Construction Law Practice
Groups. She can be contacted at
laperkins@bdblaw.com
or
561.995.2992.
L.A. IS NOW IN
FLORIDA!
The
Employment Law Practice Group Welcomes L.A. Perkins
The Employment Law Practice Group welcomes Lee-Anne
“L.A.” Perkins, an Associate attorney in the Boca Raton,
Florida office. L.A. obtained her bachelor in business
administration degree from the University of Miami
(Florida) before attending Stetson University where she
obtained a law degree in 1996.
Prior to joining Buckingham,
Doolittle & Burroughs, LLP, L.A. was associated with Quarles & Brady, LLP in
Boca Raton, Florida. L.A. focuses her practice on employment law and litigation.
L.A. has experience representing management in both the public and
private sectors in employment law matters before
administrative agencies and in federal and state court.
Her experience includes defending claims filed under
Title VII, the ADA, the ADEA, the Equal Pay Act, §1983,
the FLSA, and the FMLA.
L.A. and her husband, Steven Smith, a commercial real
estate broker, live in Boca Raton, Florida. L.A. is
involved in several community and professional
organizations. She is presently on the Advisory Board
to the Florida Atlantic University, School of Arts, and
she is the Pro-Bono Chair for the Florida Association of
Women Lawyers - Palm Beach County Chapter. Welcome
L.A.!
Practicing in
Buckingham Boca RatonSM
 If you do business or have a residence in Florida, we
want to remind you we have a Florida office staffed with
outstanding attorneys. Our Florida office can address
business, estate planning, financing, intellectual
property, litigation, employment, and real estate
matters, to name a few. We welcome the opportunity to
provide legal services when you are traveling to
Florida.
For additional information contact us
at 1.800.686.2825.
Save
the Date for these Upcoming Presentations:
 On
July 12, 2004,
Gerald B. Chattman
(Buckingham Cleveland) will be a presenter at a
National Business Institute Seminar titled Exempt
Organizations and Charitable Activities in Ohio at
The Forum Conference Center in Cleveland, Ohio.
Please contact NBI for more information, at
www.nbi-sems.com or 800.930.6182.
Planning for our Annual Employment Law Seminar
is
under way. The dates and times are as follows:
AKRON: October 13, 2004 at the
Hilton Akron/Fairlawn
Registration: 1:00 -
1:30
Seminar: 1:30 -
4:45
CLEVELAND: October 20, 2004 at the Embassy
Suites in Independence
Registration: 1:00 -
1:30
Seminar: 1:30 -
4:45
CANTON: October 27, 2004 at the Kent
State University
Stark Campus, Professional Education and Conference
Center
Registration: 1:00 -
1:30
Seminar: 1:30 -
4:45
If you are interested in obtaining information on upcoming
seminars or would be interested in having speakers from
Buckingham, Doolittle & Burroughs, LLP make a presentation
to your organization, please contact: Lorna Henderson,
Senior Marketing Coordinator
lhenderson@bdblaw.com or 800.686.2825 ext. 473. |
