Lessons from the Mavericks Sexual Harassment Scandal: Specific Steps Your Company Can Take to Avoid a #MeToo Situation

Mavericks Presser CH Monday KDFWBCME01.mpg_16.14.49.12_1519684038394.png_5007658_ver1.0_640_360On Wednesday, Mavericks released a 43-page report containing the results of a seven-month investigation into the allegations of a pervasive culture of sexual harassment that permeated the organization over the past 20 years.  The allegations first came to light in an article published by Sports Illustrated in February of this year.  The investigation report largely substantiates many of the facts described in the article and provides many recommendations for changes within the Mavericks organization. 

If your company is worried about the #MeToo movement (hint, every company should be) and is attempting to make sure that it eliminates sexual harassment among its employees, the recommendations from the Mavericks’ investigation report provide a good road map for doing so. 

Ask yourself, is your company doing the following: 

  • Increasing the number of women through the organization including in leadership and supervisory positions. 
  • Improving formal harassment reporting process and creating paths for victims to report misconduct
  • Evaluating, and holding accountable, all executives, managers, and supervisors on their efforts to eliminate harassment and improve diversity of all kinds throughout the organization
  • Conducting anonymous workplace culture and sexual harassment climate surveys on regular basis to understand the culture of the organization and whether problems exist
  • Establishing clear hierarchies and lines of decision-making authority within the organization
  • Strengthening and expanding Human Resources, and implementing clear protocols and processes for evaluating and adjudicating workplace misconduct issues. This should include providing clear communication to employees on the anti-harassment policy and how to report harassment. 
  • Providing “prompt and proportionate” and “consistent” discipline across the organization when harassment or misconduct has been substantiated. 
  • Providing regular training for all employees on sexual harassment (including bystander intervention training), and special training directed at managers and supervisors.  Leaders across the Company should participate in the training and take an active leadership role in providing trust and safety in the workplace. 
  • Adopting clear, transparent, office-wide processes for hiring, on-boarding, promotions, lateral transfers, performance valuations, salary increases, and discipline within the organization. This should include centralizing key employment functions within the Human Resources department. 
  • Collecting and using data to add value to the company and to identify weaknesses. 
  • Requiring that all leaders, managers, and supervisors engage in efforts to improve workplace culture and to ensure a diverse inclusive workplace.

BOTTOM LINE:  Eradicating sexual harassment in the workplace requires commitment from the upper echelons with the company, creation of clear anti-harassment policies, effective training, and consistent enforcement of such policies. If your company is committed to making a change, but not sure where to begin, the above recommendations provide a good starting check list for making such changes. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

 

Employers Are Responsible for Stopping Sexual Harassment by Non-Employees

imagesIn the wake of the #MeToo movement, many employers remain unaware that they must investigate sexual harassment allegations and take appropriate measures if sexual harassment is perpetrated by non-employees, such as customers  or vendors.

A recent opinion from the Fifth Circuit Court of Appeals addressed just this issue when the court considered whether a nurse at a nursing home facility who repeatedly complained of sexual harassment by a patient with dementia presented a strong enough claim to go to trial.  The Fifth Circuit found that she did. And although Gardner v. CLC of Pascagoula, L.L.C. involved a rather common and pervasive problem of patient-nurse sexual harassment, the Court’s analysis is usefull for all companies where employees have interaction with customers or third parties on a regular basis.

The Court of Appeals reminded that pursuant to the Regulation issued by the Equal Employment Opportunity Commission (EEOC): 

An employer may [] be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases the Commission will consider the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of such non-employees. 29 C.F.R. 1604.11(e)

In Gardner, the patient who suffered from a host of mental disorders, had a documented history of grabbing the female nurses’ “breasts, butts, thighs, and trying to grab their private areas,” and asking them to engage in sexual activity with him as well as making lewd sexual comments.  Several nurses routinely recorded this behavior on the patient’s chart and made complaints to their supervisors. Additionally, at least one of the supervisors observed the patient behaving in a sexually inappropriate manner.  

When the plaintiff-nurse attempted to discuss her concerns about the patient’s behavior, her supervisor and the nursing facility administrators allegedly laughed and told her to “put [her] big girl patients on and go back to work.”  Eventually, after the patient punched her in the breast while she was trying to assist him, she asked to be reassigned.  Her request was denied.  The patient was soon transferred to an all-male facility but only after he had punched a male resident. 

The district court granted the employer’s summary judgment finding that a hostile work environment did not exist because it was “not clear to the court that the harassing comments and attempts to grope and hit [were] beyond what a person in the [nurse’s] position should [have] expect[ed] of patients in a nursing home.”  

The Court of Appeals disagreed, however, ruling that while inappropriate comments from patients with reduced cognitive abilities may not rise to the level of legally-actionable sexual harassment, where a patient crosses the line into physical contact, which progresses from occasional inappropriate touching or minor slapping to persistent sexual harassment or violence with the risk of significant physical harm, the employer must take steps to try to protect an employee. 

BOTTOM LINE: If a company becomes aware that its employees are being harassed by a third party, such a customer or vendor, the company has an obligation to take steps immediately to get the harassment to stop. This may include reassignment of the employee, adding security, conversations with a customer or a vendor, and a host of other measures.  Ignoring the situation once the employer becomes aware of it may result in a liability under Title VII. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

 

 

 

 

 

 

Federal Government Warns That Anti-Poaching and Wage-Fixing Agreements May Violate Antitrust Laws. What Does This Mean for Texas Companies?

dojThe Department of Justice (DOJ) and Federal Trade Commission (FTC) recently issued Antitrust Guidance for HR Professionals (“Guidance”) intended to alert professionals involved in hiring and compensation decisions to potential violations of the antitrust laws.

This Guidance is the result of the infamous wage-fixing anti-poaching agreement among Ebay, Google, Apple, and other heavy-weights of the tech industry, which came to light in 2010 during the DOJ investigation and a civil class action involving 64,000 employees of such companies that settled in September of last year.

You can find the full text here, but the Guidance can be boiled down to the following simple rules for HR professionals:

  • companies that compete for employees are competitors regardless of whether they sell the same products or provide the same services
  • it is unlawful for competitors to agree not to compete with each other
  • therefore, companies may not agree – expressly or implicitly, in writing or orally – not to poach each other’s employees or to cap salaries or benefits of their employees
  • specifically, HR professionals are “likely” breaking the anti-trust laws if they:
    • agree with individuals at another company about employee salary or other terms of compensation, either at a specific level or within a range (wage-fixing agreement), or
    • agree with individuals at another company to refuse to solicit or hire that other company’s employees (“no poaching” agreements)
  • HR professionals should avoid sharing sensitive information with competitors as it could serve as evidence of an implicit illegal agreement (especially where it causes companies to match each other’s arrangement)

What are the consequences of violating the anti-trust rules?  The DOJ and/or FTC may bring a felony criminal prosecution against individuals involved in anti-poaching or wage-fixing agreements, the company, or both. Additionally, individual employees may bring a civil suit for three times the damages they suffered.

Takeaway for HR Professionals: We all know that price-fixing for goods is illegal, i.e., competing companies cannot get together and agree to charge consumers a certain price for certain goods in the market.  The Guidance makes it clear that agreeing on wages for employees is just as illegal and will be prosecuted.

What does this mean for Texas companies in terms of non-compete agreements?  The companies may still enter into such agreements with their employees (as long as they comply with the Texas Covenants not to Compete Act).  However, they cannot agree with other competing companies on the terms of such non-compete agreements. For example, Companies A and B, which are competing for the same employees, cannot enter into an agreement that they both will tie up their employees with no less than a 2-year, 30-mile non-compete agreement, or that the non-compete specifically will prohibit employees from working for Company A (if they worked for Company B), and vice versa. When in doubt about the legality of your particular agreement, seek legal counsel.

Leiza litigates unfair competition, non-compete and trade secrets lawsuits on behalf of companies and employees, and has advised hundreds of clients regarding non-compete and trade secret issues. If you need assistance with a non-compete or a trade secret misappropriation situation, contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

 

Staffing Agency Could be on the Hook for Termination of an 83-Year Old Receptionist at Client’s Request

staffing-agencyThe Fifth Circuit recently addressed an interesting issue – when a staffing agency’s client asks to replace an employee, does the staffing agency have a duty to investigate the reasons for the request?  For example, if a staffing agency’s client calls and says we want you to replace Bob, who is African-American, does the agency have a duty to ask why the client wants to terminate Bob and make sure it is not because of his race? The Fifth Circuit ruled that a staffing agency must follow its usual practices in responding to a client’s desire to have an employee removed, and a deviation from such practices may serve as evidence that the staffing agency knew or should have known of the client’s discrimination. So, in the example above, if the staffing agency typically investigates a client’s complaint about an employee, but in Bob’s case it removes him without confirming that he was unable to do his job, such action may create an issue of fact (and prevent summary judgment in favor of the employer) as to whether the staffing agency knew or should have known that the client’s request to remove the employee was discriminatory.

In Nicholson v. Securitas Services USA, Securitas was asked by a client to replace an 83-year old receptionist due to her not being able to perform new technology-related tasks. Securitas removed Nicholson, without asking her for an explanation and without any investigation, and replaced her with a 29-year old employee. According to at least one of its employees, this failure to “check out” the complaint or investigate the reason for the client’s request, was not a normal procedure at Securitas. The Fifth Circuit, therefore, found that the trial court improperly granted Securitas’ summary judgment because there was a fact issue regarding whether the staffing agency knew or should have known that its client’s request to replace Nicholson was motivated by her age.

Takeway:  A staffing agency is liable for discriminatory conduct of its joint-employer client if it (1) participates in the discrimination or (2) knows or should have known of client’s discrimination but fails to take corrective measures within its control. Moreover, a staffing agency’s deviation from standard evaluation or investigation practices is evidence of discriminatory intent.

Thus, staffing agencies should follow their policies and procedures in a consistent manner when faced with a client’s request to remove or replace an employee. If such request is later found to have been based on a prohibited discriminatory factor, a staffing agency who replaces an employee without investigating the client’s complaint may be liable for discrimination along with its client, if its failure to investigate constitutes deviation from its standard procedures.

Leiza is a business and employment litigation attorney in Dallas, Texas. If you need assistance with a business or employment dispute contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

 

Are Non-Compete Agreements Enforceable in Texas?

kkGenerally, Texas allows non-compete agreements between employers and employees as long as they are reasonable in scope, geographic area, and term, and meet a few other requirements. See my previous posts about those requirements here, here, and here

Practically speaking, however, whether a particular non-compete agreement is valid depends heavily on the exact language used in the agreement.  Just as with any other contract, Texas courts will usually look at the precise language of a particular employment agreement to determine what the parties had in mind when they entered into it. 

Last year, a hospitalist group in Houston learned the above principles the hard way when it attempted to enforce a non-compete covenant against a physician who went to work for a competitor and discovered that the non-compete did not prohibit the physician from doing so. 

In Tummalla et. al. v. Total Inpatient Services, P.A., the non-compete clause between the hospitalist group and the physician stated the following:

6.2 NonCompete. In consideration for the access to the Confidential Information provided by [TIPS] and in order to enforce the Physician’s Agreement regarding such Confidential Information, Physician agrees that he/she shall not, during the term of this Agreement and for a period of one (1) year from the date this Agreement expires pursuant to Section 8.3 or is terminated by Physician pursuant to Section 8.6 (the “Restriction Period”), without the prior written consent of [TIPS], except in the performance of duties for [TIPS] pursuant to this Agreement, directly or indirectly within any Hospital in the Service Area or any other hospital in which the Physician practiced on behalf of [TIPS], in excess of 40 hours, within his last year of employment with [TIPS]:
6.2.1 Provide services as a hospitalist physician to any entity that offers inpatient hospital and emergency department services.
In a separate provision in the same agreement, however, it stated that the physician’s first 12 months on the job were to be considered an “introductory period” during which either party could terminate the employment relationship for any reason. The specific paragraph stated that it applied notwithstanding any other provision in the agreement and it failed to included or mention any non-compete restrictions. 

The court of appeals analyzed these various clauses in the contract and concluded that because the physician terminated his employment with the hospitalist group within the first year, i.e. the “introductory period,” the post-employment non-compete clause did not apply to him. Thus, he was free to compete with his former employer. 

TAKEAWAY FOR EMPLOYERS: Employers should have a qualified attorney draft and/or review their non-compete agreements.  While there are many forms out there, because non-compete agreements in Texas have to be catered towards each employer’s business and because courts will scrutinize the language when determining whether to enforce the agreement or not, using a standard form may result in the employer not being able to enforce it due to gaps in the language or failure to address specific termination situations.

TAKEAWAY FOR EMPLOYEES:  Signing a non-compete agreement without reading it first can result in a major headache down the road and severely limit employee’s career options.  Therefore, employees should always: (1) read the agreement; (2) request a clarification if something is not clear; and (3) keep a copy of the signed agreement for their records.

Leiza litigates non-compete and trade secrets lawsuits in a variety of industries, and has advised hundreds of clients regarding non-compete and trade secret issues. If you need assistance with a non-compete or a trade secret misappropriation situation, contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

Steve Sarkisian Files Wrongful Termination Lawsuit Against USC Trojans; Claims Discrimination Based on Alcoholism

downloadIn early October, the University of Southern California fired Steve Sarkisian, its head football coach after an incident where he appeared drunk during a speech at a USC event. Copies of hotel and bar receipts allegedly showing Sarkisian’s alcohol consumption far exceeding the norm spread like a wildfire on the internet

Yesterday, Sarkisian admitted that he is an alcoholic in a lawsuit that he filed in California Superior Court.  He alleged that the university discriminated against him based on his disability (alcoholism), failed to engage with him in an interactive process to accommodate such disability, and retaliated against him for his request to accommodate his alcoholism. While Sarkisian’s claims are based on violations of California state law, the Americans with Disabilities Act (ADA) covers alcoholism as disability as well, so whether you are in California or any other state, here are the basics that you need to know about providing accommodations under the ADA to employees who are alcoholics:

  • Alcoholism is considered a disability under the Americans with Disabilities Act
  • Thus, just as with any other disabled employee, employers are required to provide accommodation to alcoholics who can perform the essential functions of the job with or without a reasonable accommodation, unless doing so would create undue hardship for the employer (e.g., allowing an employee flexible work schedule to attend AA meetings or attend a rehab facility);
  • According to the EEOC, “regardless of coverage under the ADA, an individual’s alcoholism or drug addiction cannot be used to shield the employee from the consequences of poor performance or conduct that result from these conditions”; 
  • Furthermore, “an employer will always be entitled to discipline an employee for poor performance or misconduct that result from alcoholism or drug addiction”;
  • Employers can prohibit the use of alcohol and drugs at work, but must apply that rule to all employees and not just alcoholics; 
  • Employers are no permitted to tell coworkers that an employee with a disability is receiving a reasonable accommodation.

Conclusion: While an employer may strictly (and uniformly) enforce a no-drug/no-alcohol policy in the workplace, when it comes to handling employees who are recovering or recovered alcoholics or drug addicts, employers may be required to allow them certain accommodations as prescribed in the Americans with Disabilities Act.

Leiza Dolghih represents both COMPANIES and EMPLOYEES in employment litigation and arbitration proceedings.  If you are facing an actual or a potential employment dispute, contact Ms. Dolghih for a confidential consultation at at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

Is Your Non-Compete Enforceable in Texas?

stevecarelMany a business owner has been tempted to save a few hundred dollars by using a non-compete agreement found somewhere on the web or bought from Legalzoom or the like.  The problem with such an approach is, of course, that every state has different rules about what makes a non-compete agreement enforceable. What might be enforceable in one state, might be a worthless piece of paper in another. This is why obtaining a form non-compete agreement, without verifying its enforceability in Texas, is dangerous. It is also dangerous not to update employees’ non-compete agreements, as the law on this issue is always evolving.

I do not know if either of those factors were present in Hunn v. Dan Wilson Homes, but the non-compete in that case was clearly missing the language necessary to make it enforceable in Texas.  It could have been because the owner copied an agreement from another state, or did not update the agreement, or because the necessary language was omitted from the agreement by mistake.  In the end, it did not matter, as the court refused to enforce the non-compete against an employee who, after leaving his employer, continued to work directly for his employer’s client.

In Texas, for a non-compete to be enforceable it must “be ancillary to or part of an otherwise enforceable agreement at the time the agreement is made.”  The Fifth Circuit in Hunn v. Dan Wilson Homes recently re-affirmed that in Texas, a non-compete agreement must be accompanied by either a promise from employer to provide an employee with confidential information or an employee’s promise to keep confidential information provided by the employer confidential.  Without such promises, a non-compete agreement that is based simply on an employer’s promise of continued employment in an at-will contract is unenforceable.  In other states, simply promising to provide an employee with employment is enough to make a non-compete agreement valid.  However, Texas courts require more.

Takeway for Employers: Determination of the sufficiency of consideration for a non-compete executed by an at-will employee often turns on which state’s law applies.  If the relevant facts and circumstances permit, an employer should include a choice-of-law provision designating the law of a state where at-will employment is adequate consideration. However, where an agreement is governed by Texas law, a simple promise to continue to employ an at-will employee is not enough to support a binding non-compete.

Takeway for EmployeesNot every non-compete agreement is enforceable in Texas.  If your employment agreement contains a non-compete clause, you should consult with an attorney before signing your agreement to determine what consequences you will be facing if your employer decides to enforce it against you in the future. Likewise, if you have already signed one but are trying to figure out what your options are once you leave your employment, consult with an employment attorney to determine whether it enforceable and what course of action to take.

You can read the entire case here.

Leiza litigates non-compete and trade secrets lawsuits on behalf of EMPLOYERS and EMPLOYEES in a variety of industries, and knows how such disputes typically play out for both parties. If you need advice regarding your non-compete agreement, contact Ms. Dolghih for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.