Alabama Employment Law Report : Alabama Employment Lawyer & Attorney : Daniel J. Burnick : Sirote & Permutt Law Firm

I am often involved in giving advice and litigating claims alleging tortious interference with a contractual or business relationship.  The elements for such a cause of action are:   1)  the existence of a protectible business relationship; 2) of which the defendant knew; 3) to which the defendant was a stranger; 4) with which the defendant intentionally interfered; and 5) damages.  Violations can result in both compensatory and punitive damages, and allegations can be brought against corporations and individuals. 

In the case of Engineered Cooling Services Inc. (ECS) v. Star Service of Mobile(Star), the Alabama Court of Civil Appeals affirmed a judgment against Star, but remanded the case for the trial court to explain the reasons for awarding punitive damages.  Mark Davis was employed as a salesman for Star, which specializes in contracting to provide maintenance service for commercial HVAC equipment.  When hired, Davis had no experience in the HVAC field and was trained by Star.  As part of his employment, Davis signed an "Employee Confidentiality Agreement" which prohibited him from removing Star's confidential information from the premises and provided that he would not contact Star's customers or offer services from a competitor of Star for a period of one year.  After working at Star for almost 4 years, Davis was contacted by ECS, one of Star's competitors, and was offered a job at a base salary nearly twice what he was making at Star.  Davis ultimately accepted the new job offer. 

Star did everything right when it learned of Davis leaving:  it reminded Davis of the confidentiality agreement, wrote a letter to Davis reminding him of his obligations, and wrote ECS a letter informing it of Davis's obligations under the confidentiality agreement.  Soon thereafter, Star learned that Davis had sent 3 emails containing confidential information from his Star account to his personal account, and sent him a letter demanding the return of the documents.  Davis returned 2 of them on a compact disk, and deleted the 3rd from his personal account.  Within a few months of leaving Star, ECS's employees, including it's president, Doyle,  asked Davis to accompany them to call on accounts that were Star accounts.  This happened on at least 5 occasions.  On August 14, 2009, 8 months after he left Star, Davis, ECS and Doyle were sued by Star alleging a breach of the confidentiality agreement and that ECS and Doyle tortiously interfered with Star's contractual relationship with Davis.  After a non jury trial, the court found in favor of Star and awarded $1 in compensatory damages and $30,000 in punitive damages against ECS and Davis, and rendered a verdict in favor of Doyle.  On appeal, the Court of Civil Appeals upheld the $1 verdict for compensatory damages, and remanded the case to the trial court to enter it's factual findings in support of punitive damages.

Practice pointer.  When hiring a new employee from a competitor, it is always wise to ask if they have a non-compete, non-solicitation and/or a confidentiality agreement.  If the answer is yes, the new employer must take reasonable steps to determine if the new position will be in violation of the agreements, and if so, whether the new employee should actually be hired.  Employers who have such agreements with their employees, and know where the employee is going to work after leaving them, should consider advising the new employer of the existence of any agreements, and request that they not be violated.  Although the award of $30,001 may not sound like much, it does not factor in attorney's fees, costs, loss of productive time and the bad publicity.  In many cases, the amount of damages can be much larger.  Also, even though Doyle was found not liable, individuals who know of the agreements and violate them may be found personally liable.

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An ex-employee of Blue Cross Blue Shield of Alabama, Latonia Davis, pled guilty to charges of trafficking stolen identities.  Ms. Davis used the protected health information of BCBS members to try to obtain credit cards.  She apparently used the companies internal database to obtain the social security numbers of at least 7 people.  She was sentenced to a 10 year split sentence, to serve 18 months, followed by 3 years of supervised probation. 

Practice pointer.  Sensitive information, such as social security numbers, need to be protected by all companies.  This includes sensitive information of employees as well as customers/patients/members, etc.  Policies and procedures, as well as regular training, should be provided to any employee who has access to this type of sensitive information. 

Hewlett-Packard CEO resigns after Sexual Harassment Investigation

I often caution HR professionals that any employee, from the top to the bottom of the company, can be involved in sexual harassment.  On Friday, HP announced the resignation it's CEO, Mark Hurd following a sexual harassment investigation.  Mr. Hurd had on ongoing personal relationship with one of HP's contractors.  According to the Wall Street Journal, the woman at the center of the controversy is Jodie Fisher, a 50 year old sometime actress.  Ms. Fisher sent a letter to HP on June 29 alleging sexual harassment.  She now states that she is "surprised and saddened that Mark Hurd lost his job over this.  That was never my intention." Although the outcome of the sexual harassment investigation found that HP's sexual harassment policy was not violated, HP found that Mr. Hurd "demonstrated a profound lack of judgment" by filing several inaccurate expense reports meant to conceal the relationship.  According to the WSJ, Mr. Hurd "did not fill out his own expense reports and offered to pay back the amounts involved, which totaled about $20,000."  Interestingly, the WSJ is reporting that business experts are debating whether the HP board acted decisively or too rashly in terminating Mr. Hurd.

Practice pointer.  Policies and procedures are for ALL employees, even the CEO.  They must be enforced consistently and fairly for all, even if it means disciplining, up and including termination, the CEO, best sales person, or other valuable employee. 

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Alabama Child Labor Law Changes

Earlier this year, the Alabama Legislature passed the Child Labor Reform Act of 2009. The lawyers in Sirote's Labor & Employment Group have received a number of questions about the changes from our clients who regularly employ minors. There were some small changes to the substantive provisions regarding the hours of work and the prohibited occupations. However, the primary changes relate to the permitting process and record-keeping requirements for employers. The full text of the Act can be found at Alabama Code § 25-8-32, et seq. Here is a summary of the primary changes to the law:

New Requirement for Certificates

Individual work permits for each minor employed are no longer required. Instead, an employer must purchase a certificate from the Alabama Department of Labor fir each location where it will employ minors. A Class I Certificate is required for each location where the employer will employ minors ages 14 or 15, and a Class II Certificate is required for each location where the employer will employ minors ages 16 or 17. The certificates, which must be renewed annually, cost $15 and may be purchased online at www.labor.alabama.gov.

Eligibility to Work Form

If an employer will employ minors under 16 years of age, the employer must receive and maintain an 'eligibility to work" form for each such employee. Similar to the old work permits, these forms are issued to the students by schools. The forms certify that the students have satisfactory grades and attendance in order to be eligible for employment. The employer must maintain the "eligibility to work" form in each 14 and 15 year old employee's personnel file.

Additional Record-Keeping and Posting Requirements

Each employer must now keep on the premises at which a minor is employed a separate file for each minor employee. The file must include the employee's name, home address, date of birth, date of hire, proof of age, school of attendance, and time records that state the number of hours worked each day, including the employee's starting and ending times, as well as break times. The employer must keep these records on file for no less than three years.

Along with the new record-keeping requirements, there is a new Child Labor Law poster. At every location where minors work, the employer must display the new poster.

New Break Period Requirement

Employees under 16 years of age who are employed for more than 5 continuous hours must now be given a documented break period of at least 30 minutes for a meal or rest. The break period is applicable whether or not school is in session. There is no similar break provision fir employees age 16 and older.

Penalties for Violation

If your business employs minors, you must be sure that you are in compliance with these new provisions. Of course, you must also be in compliance with the long-standing restrictions on the number of hours and types of occupations which may be worked by minors. Violators of the child labor laws may be subjected to civil penalties from $50 to $5,000 depending upon the nature of the violation.

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Recently, Cindy F. Crawford and Jennifer Nycz-Conner wrote an article in the Birmingham Business Journal titled "Reading References".  The article dealt with some of the problems with giving references, and how to get additional information when employers only give the dates of employment.  Providing references is a potential pitfall for employers, and may subject both the employer and the person giving the reference to various causes of action.  These causes of action may include defamation and fraud.  The employer may be subject to additional claims if they provide different types of references for different employees.  For example, a white male may get a glowing reference, but an African American female may get no reference at all other then dates of employment.  This may lead to claims of discrimination based on race and gender.  The law does not require that employers provide references for current or ex employees.  It is up to the employer to decide what it's policy will be: providing just dates of employment, providing more detailed information, and whether the reference needs to be in writing.

Practice Pointer.  Whatever the employer's position is on giving references, it is important that there be a written policy about what type of reference can be given, and just as importantly, who gives it.  Only a particular individual or a small select group of people should be responding to requests for references.  This will help reduce the potential exposure to employers and individuals when responding to requests for references. 

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