Creativity in Employment Contracts

Seattle Seahawks football player Eddie Lacy recently received a $55,000 employment bonus - not for his performance on the field, but for weighing a required weight at the beginning of training camp.

ESPN.com reported on this and other clauses in the employment contracts of professional athletes, including:

• why Michael Jordan's "love for the game" clause specifically allowing him to play basketball anytime, anywhere;
  
• why Baseball Hall of Famer Rollie Fingers was paid a bonus to grow his famous mustache; and
  
• why English footballer Stefan Schwarz was prohibited from traveling into space.

The takeaway from these unique clauses: when drafting your employment contracts, don't be afraid to think outside the box.  A creative contract may be just what is needed to attract or retain a talented employee. 

Opening Day Read: Baseball Mascots and the Law

Just in time for Opening Day 2017, Attorney Christian H. Brill and Prof. Howard W. Brill have published a comprehensive examination of legal disputes involving mascots and America's national pastime.

"Baseball Mascots and the Law" discusses a variety of legal questions involving mascots, such as:

• Can a Dayton Dragons fan sue if she was distracted by a mascot’s performance when she was injured by a foul ball?
• Do the actions of an “unofficial mascot” tarnish the protected trademarks of the Chicago Cubs?
• Can a Pittsburgh Pirates mascot be fired for disparaging comments posted on social media?
• Does the arrest of protestors burning a Cleveland Indians mascot effigy violate free speech rights?

Originally presented at the 27th Cooperstown Symposium on Baseball and American Culture at the National Baseball Hall of Fame and Museum in Cooperstown, New York, the article covers such areas of law as tort law, intellectual property law, and employment law.

The entire article is available from the Kansas Law Review.

iPhones and Overtime, Part II

From a French law limiting employees' responsibility for after-hours emails to a federal court ruling placing new federal overtime rules on hold, employment law governing overtime pay continues to adapt.

A previous post on this blog discussed a lawsuit in which Chicago police officers alleged that they were issued smartphones and required to use them while off duty, but were not paid overtime. Since that original post, a federal magistrate ruled in favor of the city of Chicago. The court determined that the city did not know that the plaintiffs were working overtime without compensation, in part because other officers did document their overtime use of smartphones and were compensated accordingly.

Wage & Hour Insights has a detailed analysis of the court's ruling:

In short, the rule is simple: employers must make a good-faith, reasonable effort to track all work time for non-exempt employees and pay employees accordingly. The law doesn’t mandate perfection, nor will it hold employers liable for employees who fail to report their time through no fault of the employer. 

An appeal is pending.  In the meantime, the takeaways for employers remain the same (whether considering the future of overtime regulations or employee smartphone usage): establish clear written policies, keep detailed records, and train employees accordingly.

New Law Permits French Employees to Ignore Late-Night Work Emails

French employees now have the right to ignore work-related emails outside working hours after a new law became effective on January 1, 2017.

From the Washington Post:

The new employment law requires French companies with more than 50 employees to begin drawing up policies with their workers about limiting work-related technology usage outside the office, the newspaper reported.

The motivation behind the legislation is to stem work-related stress that increasingly leaks into people's personal time — and hopefully prevent employee burnout, French officials said.

“Employees physically leave the office, but they do not leave their work. They remain attached by a kind of electronic leash, like a dog,” Benoit Hamon, Socialist member of Parliament and former French education minister, told the BBC in May. “The texts, the messages, the emails: They colonize the life of the individual to the point where he or she eventually breaks down.

The "right to disconnect" law is part of a series of reforms designed to relax France's employment regulations.

Nine to Five? The Uncertainty of Federal Overtime Regulations

On November 22, 2016, a federal judge in Texas granted a nationwide injunction to prevent implementation of new federal overtime regulations doubling the minimum salary of exempt employees.The ruling, which was issued only days before the rule was to become effective, has created uncertainty for many businesses.

First, it is important to note that this preliminary injunction is only a temporary hold on the overtime rule. The regulation may be implemented in the future, but given potential appeals by the Labor Department, as well as possible changes under the incoming Trump Administration, it is impossible to know when, if ever, the rule may become effective.

What should employers do in the meantime?  At least three general recommendations are in order:

1. Continue to comply with the existing overtime regulations.  Because the new regulation is not in effect, employers are not required to pay overtime wages as provided under the new rule.
   
2. Assume that the new regulation will be implemented in some form, and begin planning accordingly. For instance, our recommendation is that all employers keep detailed records of employees’ hours, whether those individuals work full-time, part-time, or volunteer. Likewise, it is a good time to update employee job descriptions, company policies, and employee handbooks to include specific procedures and guidelines for working overtime (even including such issues as smartphone usage).
   
3. If a business has already advised employees about the salary increase or has actually implemented the increase to keep up with the new federal regulation, it may be best to uphold those changes. Although businesses are not required to do so, honoring such a commitment encourages a relationship of good will between employer and employee. In these cases, employers may wish to consider a written agreement in which the employer will pay overtime wages to those employees who would have been eligible under the new regulation for a limited time period in the discretion of the employer.  

More suggestions are available at The Ohio Employer's Law Blog or The Employer Law Report.

Faith-Based Discrimination in Hiring

Can a faith-based organization refuse to hire employees who do not share its faith?

Section 702 of the Civil Rights Act of 1964 (42 U.S.C.S. § 2000e) exempts religious organizations from the prohibition against discrimination in employment on the basis of religion. (Ohio has a similar statute.) Therefore, if an organization is religious for purposes of the statute, it can restrict employment to those of a certain religion in order to carry out its activities.

In order to qualify for the exemption, the organization must be primarily religious.  The definition is not included in the statute but has been explored by the courts.  For example, a 2010 federal case involving the relief and development organization World Vision examined if the organization is 1) organized for a self-identified religious purpose; 2) engaged in activity that is consistent with and furthers that purpose; and 3) holding itself out to the public as religious.

This exemption also extends to permit a religious organization to discriminate in hiring for its nonprofit secular activities, even if the employment is not primarily religious.  For example, in 1987, the Supreme Court ruled that the Church of Jesus Christ of Latter-Day Saints were permitted to terminate a non-Mormon employee of a nonprofit gymnasium which it controlled.

Religious organizations should be sure that all documents (from employment agreements to corporate articles) consistently reflect the organization's nature as religious and emphasize that all its activities are designed to further the organization's purpose.

More information regarding religious discrimination in the workplace is available from the U.S. Equal Employment Opportunity Commission.

Negative Online Reviews: What Can You Do?

Recent studies have found that 88% of customers have been influenced by an online customer service review and that almost half of job seekers had researched companies on GlassDoor, an online company review site.  If these reviews are negative (and particularly false), however, they can have a lasting negative impact on your business.

In some cases, businesses may have a claim for defamation against individuals who post false negative reviews online.  Ohio courts have defined defamation as follows:

"Defamation is the publication or communication of a false statement of fact that injures someone by adversely affecting the person's (1) reputation, (2) business, or (3) position by exposure to public hatred, contempt, ridicule, shame, or disgrace. The essential elements of a claim for defamation are that (1) the defendant made a false statement; (2) that false statement was defamatory in the sense that it reflected unfavorably on the plaintiff's character or injured his trade or business; (3) the statement was published or communicated; and (4) the defendant acted with the necessary degree of fault."  Fuchs v. Scripps Howard Broad. Co., 170 Ohio App. 3d 679.

The Columbus Dispatch recently reported on a lawsuit between a tenant accused of making defamatory comments that injured the landlord's business.

[James] Raney was a tenant at the Meridian Apartments in the Fifth by Northwest neighborhood of Columbus, then owned by Connor Group. While living there, he commented online about what he saw as conditions that fell short of the “luxury” described in marketing materials.

He moved out the complex but continued blogging about Connor Group.

Connor Group said Raney’s claims were false and harmful to the company, while Raney and his attorney argued that the online postings were constitutionally-protected opinion.

As in this case, the most difficult questions are often: 1) Were the negative statements presented as fact or opinion? and 2) Did the statements result in actual damages to the business?  

If your business has been adversely affected by negative online reviews, please contact our firm to discuss the best course of action. 

All In The Family: Do Job Applicants Match Your Company Culture?

According to a recent survey by the Conway Center for Family Business, about two-thirds of local family-owned businesses plan to increase hiring this year despite worries about finding qualified workers.  One of the major difficulties identified by leaders was finding applicants who fit with the existing company culture.

From the Columbus Dispatch:

For the first time, the survey found a growing number of companies that said finding someone who was the "right fit" for the culture of the business was a challenge. These would be applicants who embody the value and the culture of the business. 
...
The problem with hiring partly reflects a growing economy in central Ohio and family businesses that are doing well enough that they need to add staff. It also reflects the region's low 4.4 percent jobless rate. 

Among the survey's other findings:

• 90% of respondents said the local economy was going somewhat well or very well.
• After concerns about hiring, businesses expected to face challenges related to the costs of health care and materials.

NCAA Tournament to Cost Employers $3.9 Billion in Lost Productivity

Even though the Buckeyes are not participating this March, Ohio employers should not forget about the impact that the NCAA men's basketball tournament can have on the workplace. 

From the Columbus Dispatch:

Distracted workers filling out NCAA tournament brackets and watching games at the office are expected to cost their employers $3.9 billion in lost productivity this week.

That's according to placement firm Challenger, Gray & Christmas, which estimates that the average worker will spend three hours of work time on March Madness.

The firm estimates that 20 percent [of] employed Americans could join office pools this year.

As you plan for March, don't forget to check out our trademark and employment tips to help employers manage the madness.

Snow Days and Your Business

Should your business pay employees if a blizzard prevents them from working?

From Employers Lawyers Blog:

Under the Fair Labor Standards Act (FLSA), you don’t need to pay non-exempt employees for time not worked, meaning you don’t need to pay non-exempt employees for time missed due to weather-related reasons. This applies whether your business completely shuts down for inclement weather, or if it remains open and individual employees can’t report to work. 
... 
Exempt employees, on the other hand, can’t have their salaries reduced “for absences occasioned by the employer” so if your company closes due to bad weather for less than a full workweek, you must pay exempt employees their full salary for that week. 

Within these broad guidelines, it is advisable to tailor your weather-related policies to your unique business. For example, should nonexempt employees be paid if the business closes early? Can some employees work from home? Under what considerations will the business close? It is essential for your employee handbook to address these and other issues to provide clarity to employees and reduce the potential for misunderstanding or liability.

Upcoming CLE: Baseball Mascots and the Law

Attorney Christian H. Brill, along with Chief Justice Howard W. Brill, will be presenting a Continuing Legal Education seminar on Friday, October 2, 2015, at the 2015 University of Arkansas School of Law Reunion Weekend in Fayetteville, Arkansas.  The seminar, Baseball Mascots and the Law, is a modified version of a presentation given earlier this year at the National Baseball Hall of Fame and Museum in Cooperstown, New York.

Attendees will discuss current legal issues in such fields as torts, employment law, constitutional law, criminal law, and intellectual property by examining the intersection of baseball mascots and the law.

Baseball Mascots and the Law

Attorney Christian Brill is speaking this week at the 27th Cooperstown Symposium on Baseball and American Culture at the National Baseball Hall of Fame and Museum in Cooperstown, New York.  The presentation, made with Prof. Howard W. Brill, is entitled “Baseball Mascots and the Law” and covers such areas of law as tort law, intellectual property law, and employment law.

Brill will discuss a variety of legal questions involving mascots, such as:

• Can a fan sue a team for injuries resulting from objects thrown by a mascot?
• Can a California or Ohio plaintiff sue if he was distracted by a mascot’s performance when he was injured by a foul ball?
• Is a mascot’s act involving a large purple dinosaur trademark infringement or parody?
• Do the actions of an “unofficial mascot” tarnish the protected trademarks of a baseball franchise?
• Can a mascot be fired for disparaging comments posted on social media?
• Does the arrest of protestors burning a mascot effigy violate free speech rights?

The Cooperstown Symposium on Baseball and American Culture, co-sponsored by SUNY Oneonta and the National Baseball Hall of Fame and Museum, examines the impact of baseball on American culture from interdisciplinary and multi-disciplinary perspectives.

March Madness (TM)

As they do every March, words like "Cinderella", "bracket", and "madness" have again begun to take on new meaning.  But, just like the phrase "Super Bowl", businesses should be wary of using the trademarked term "March Madness" or risk facing allegations of infringement.

The roots of March Madness go back to 1939, when an Illinois High School Association (IHSA) official named Henry Porter apparently coined the phrase to describe the state basketball tournament.

From the Chicago Tribune:

"A little March madness may complement and contribute to sanity and help keep society on an even keel," [Porter] wrote.

Three years later, he punctuated his point with a poem, "Basketball Ides of March," which included these lines: "The Madness of March is running. The winged feet fly, the ball sails high. And field goal hunters are gunning."

In 1982, announcers began to use March Madness to describe the National Collegiate Athletic Association's men's basketball tournament, and in 1996 the IHSA sued to protect its trademark rights in the phrase.

As a result of the litigation, the NCAA and the Illinois association reached an agreement to create an new entity - March Madness Athletic Association, LLC  - which now holds the trademark to "March Madness" and regularly takes action to enforce its mark.

The bottom line? In addition to determining how, if at all, employees should participate in the tournament, employers should be careful not to imply that they have any official connection to the NCAA contest.

Arkansas Law of Damages Released

One of our attorneys, Christian H. Brill, and his father, Prof. Howard W. Brill recently published the 6th edition of Law of Damages, a comprehensive treatise on damages law in Arkansas. The volume is now available for purchase from Thomson Reuters.

Completely rewritten for the first time in more than a decade, the 6th edition of Law of Damages covers both the general principles of damages law in Arkansas and the damages relating to substantive principles of the law.

Part one treats damages generally, discussing damages in their many forms. Part two puts these varieties into perspective, relating them to substantive areas of the law.

The text also:

• Provides in-depth discussions of different types of damages, including punitive damages, compensatory damages, attorneys fees, interest, and costs
• Includes instruction on procedural and evidentiary aspects of proving and calculating damages
• Discusses application of statutes and case law regarding damages to specific fields of law

With over 4000 judicial decisions and numerous statutory and secondary references, the new edition comprehensively covers Arkansas law. It includes expanded sections on compensatory damages, apportionment of damages, attorney fees, contracts, real property, restitution and wrongful death.

Previous editions have been cited over 200 times by Arkansas state and federal courts. As it has for 30 years, the volume will continue to be an essential text for every Arkansas attorney’s book shelf, and will serve as a tool for bench and bar.

Brill, an Arkansas and Ohio attorney, has been practicing with Mallory Law Office, LLC since 2013.

Oral Agreements vs. Written Contracts

Many contracts include a clause like this one:

Entire Agreement: This Contract constitutes the entire agreement between the parties and supersedes any and all prior arrangements, agreements, or discussions with respect to this subject matter. Parties have made no representations other than those contained in this Contract. 

A written contract is presumed to be the final agreement between the parties, and that presumption is even stronger when the agreement contains a clause of this type. What this means is that under the “parol evidence” rule, a party is generally prevented from introducing evidence in court that contradicts the written agreement.

For example, a Central State University professor hired on a written 10 month employment contract could not introduce evidence of a prior oral agreement of a three year contract.  Likewise, imagine a car salesperson who promises “no money down” but provides a final written contract requiring a $1000 down payment. In both cases, the written agreement is controlling.

The moral? Since you will be bound by the written agreement, both you, and an attorney, should read the document carefully before you sign it to make sure that it reflects all previous written or oral discussions.

German Labor Ministry Bans After-Hours Employee Contact

In a previous post, we examined whether employees could owe overtime pay to non-exempt employees who use their company smartphones after normal working hours and how employers should establish clear policies governing smartphone usage.

In Germany, this need for clarity was highlighted when the country’s labor ministry recently banned managers from contacting employers after-hours except in case of emergency. . Under the guidelines, employees are not to be penalized for failing to check voicemails after hours and should only be contacted if the matter cannot wait until the next workday. Other German employers, including BMW and Volkswagen, have also established policies to limit after-hours contact. The policy comes in the wake of an apparent suicide by a Swiss telecom executive who had admitted the constant use of his smartphone caused him extreme stress.

While these guidelines were established to protect the “mental health” of employees rather than to avoid overtime pay, the principle is the same. Employers and employees both benefit when clear policies are established and communicated.

Sixth Circuit Rules on Telecommuting as Reasonable Accommodation

Yesterday, the 6th Circuit Court of Appeals issued a ruling in EEOC v. Ford Motor Co., deciding in favor of an employee who requested to telecommute to work for medical reasons.

The Ohio Employer's Law Blog has this summary of the case, where a key issue was whether physical presence was an essential function of the employee's job:

Yesterday, in EEOC v. Ford Motor Co., the 6th Circuit, for the first time, recognized that modern technology is making telecommuting a realistic reasonable accommodation option. . . . 

"[W]e are not rejecting the long line of precedent recognizing predictable attendance as an essential function of most jobs.… We are merely recognizing that, given the state of modern technology, it is no longer the case that jobs suitable for telecommuting are “extraordinary” or “unusual.” … [C]ommunications technology has advanced to the point that it is no longer an “unusual case where an employee can effectively perform all work-related duties from home.” 

For more, visit the Ohio Employer's Law Blog.

iPhones and Overtime

According to a recent Pew Research study, 55% of American adults have a smartphone and 63% of cell phone users use their phone to go online. The growth of smartphone usage has made it easier – and more acceptable – for employees to perform job responsibilities before or after the regular working day.

For employers, however, these technological advances can be dangerous. The Fair Labor Standards Act (FLSA) requires non-exempt employees to receive overtime pay for working more than 40 hours in a week. If non-exempt employees use their phones to work after-hours, the employer could owe them overtime pay.

A pending case in Illinois federal court, Allen v. City of Chicago, has brought this issue to light. In the lawsuit, a Chicago police officer alleged that he was required to regularly check his employer-issued Blackberry device and respond to e-mails, voice mails, and text messages while off duty but not paid overtime. While it is important to note that a final decision in the case has not been reached, the court has allowed the suit to proceed, finding that Allen made plausible allegations that the City violated the FLSA.

Whether or not Allen is ultimately successful, the case can already teach employers a few lessons:

1. As much as possible, only provide smartphones to exempt employees who are not subject to overtime pay requirements. 
2. If non-exempt employees need smartphones, establish clear written policies to detail who should be issued a phone and what type of after-hours use is permissible. 
3. Require the non-exempt employee to carefully track any after-hours work, and review the employee’s records for accuracy. 
4. Provide training to managers, supervisors, and employees, to ensure knowledge and compliance. 

For a more detailed look at these issues, visit For the Defense, the Legal Intelligencer, or Parker McCay.

Managing the Madness for Employers

As the NCAA Men’s Basketball Tournament tips off during the middle of the workday today with Ohio State’s opening game against Dayton, employers have a dilemma.

ThinkHR's Laura Kerekes put it this way:

So let’s face it: productivity is reduced somewhat during March Madness. But also consider that office morale and camaraderie can also be impacted favorably by this event, too. So what should an employer do? Embrace March Madness, ignore it, or manage it? 
 
Recent calculations by global outplacement firm Challenger, Gray & Christmas, Inc. estimated that office pools and online streaming of basketball games could cost America’s employers as much as $1.2 billion for every unproductive work hour during the first week of the tournament. In addition, office pools often violate state or federal anti-gambling laws.

Despite these dangers, employers gradually seem to be embracing, or at least tolerating the tournament. HR executives point to the positives of team building and employee engagement. At least one recent study says March Madness may even boost employee morale. In addition, employers likely realize that the ubiquity of smartphones allows avid fans to follow the games regardless of where they are.

So what should employers do to manage the madness? Recommendations include a free-to-enter company-wide office pool; televisions in break rooms; a relaxed dress code to allow employees to wear their team’s colors; or even flexible hours to catch the big game. And as always, well-defined and clearly communicated office procedures are a must.

Non-Compete Agreements: What is Reasonable?

Modern employment or franchise contracts often include a noncompetition clause or agreement which restricts an employee’s ability to compete with the employer after ending his employment. These provisions are designed to prevent a former McDonald’s franchisee from launching a new Burger King franchise down the street or prohibit a paper salesperson from soliciting his former employer’s clients from a competing company in the same building.

For example, a noncompetition clause might include language such as:

• “For a period of one year following the termination of the employment relationship, Employee agrees not to engage in any way in a similar or competing business within fifty miles of the business location.”
• “For a period of two years following the termination of the employment relationship, Employee agrees not to directly or indirectly solicit any person or entity who are or have been customers of the Employer.” 

These clauses are valid to protect the legitimate business interests of the employer. However, the restrictions, particularly the time and geographic restrictions must be reasonable.

In Ohio, this means that the restrictions are 1) no greater than required to protect the employer; 2) do not impose undue hardship on the employee; and 3) do not injure the public. (Raimonde v. Van Vlerah, 42 Ohio St. 2d 21, 26 (Ohio 1975)).

When determining reasonableness, a court can examine a variety of issues such as the duration and distance restraints; whether the employee has confidential information; whether the employer receives a disproportionate benefit from the agreement; and whether the covenant eliminates ordinary competition or unfair competition.  (Raimonde v. Van Vlerah, 42 Ohio St. 2d 21, 26 (Ohio 1975)).

If a court determines that the restrictions are unreasonable, it can modify the employment agreement. For example, a contract prohibiting court reporters from engaging in court reporting or stenography anywhere in Franklin County for two years was reduced by the court to a one year restriction within the city of Columbus. (Rogers v. Runfola & Associates, Inc., 57 Ohio St. 3d 5, 565 N.E.2d 540 (1991)).

Noncompetition clauses are important to include in an employment contract, but employers should ensure that their agreements are narrowly tailored, reasonable in scope, and well-drafted.