HR Administration

Be Careful What You Bring Upon Yourself When Suing an Ex-Employee

By Staff Report

Jan. 14, 2013

Last week—in Quicken Loans,Inc. (1/8/13) [pdf]—an NLRB administrative law judge invalidated the confidentiality and non-disparagement provisions in an employment agreement between Quicken Loans an an ex-mortgage banker, Lydia Garza. This decision continues the NLRB’s march towards the overly broad expansion of the definition of protected concerted activity. Molly DiBianca, at her Delaware Employment Law Blog, sums up the decision thusly:

Admittedly, the ALJ’s conclusion that an employer is not free to contract with its highly compensated professional employees that those individuals will not disparage their employer or steal its confidential and proprietary information is a bit depressing. But keep in mind the remedy, friends. Having found that the provisions violated the NLRA, the remedy ordered by the ALJ was that the provisions be revised. Or, if the employer didn’t want to go to the trouble of reprinting new agreements for all of its highly compensated brokers, it could simply provide a single-page addendum, notifying those highly paid employees that the two provisions were rescinded.

I want to focus on another business lesson from the decision—why the employee filed the case in the first place. Here’s the ALJ’s summary of the charging party’s motivation for filing the charge with the NLRB.

Garza testified that shortly after she left the Respondent’s employ, she and five other former employees of the Respondent were sued by the Respondent for an alleged violation of the no contact/no raiding and the non-compete provisions of the Agreement.

I’m fairly certain that Garza never even thought filing a challenge to her employment agreement with the NLRB until she got sued and had to hire a lawyer, who, in turn, reviewed the agreement and saw an opening.

If you are going to sue an employee, current or former, make sure you do your diligence of your own potential liabilities. If you uncover something that can come back and bite you, make sure it is a claim with which you can live. Depending on what you unearth, leaving well enough alone with your employee may be the most prudent course of action.

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

HR Administration

Policy management: What is it and what does it look like for HR?

Summary Policy management involves the creation and maintenance of administrative procedures and guidel...

hr policy, policy automation, policy management

workforce blog

Compliance

Minimum Wage by State in 2022 – All You Need to Know

Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

HR Administration

Rest and lunch break laws in every US state

Summary Federal law does not require meal or rest breaks Some states have laws requiring meal and rest ...