New York Employment Lawyer Blog

New York still enforces non-competition agreements. These agreements have haunted employees for ages because they severely restrict a person's ability to find a new job. New York employees can find themselves trapped in bad jobs because of these agreements. Non-competition agreements also force experienced employees to change careers because they prevent people from transferring positions among competing firms in the same fields.

In California, however, these agreements are void and cannot be enforced. California has determined that non-competition agreements do not serve any good public purpose and will not enforce them. In fact, if a California employee loses a job over a non-compete agreement, they can sue for wrongful termination. Why is New York still in the dark ages and allowing companies to restrict an employee's ability to move between jobs? The public loses here because it is bad for the economy.

In New York, good employees are trapped in bad companies. Worse, employees who build expertise in a field are forced to change careers and start over again just to avoid these non-competition agreements. This damages efficiency and harms the economy. It wastes skill and experience in the workforce.

Any legitimate concern about the transfer of confidential company information can be handled with a confidentiality agreement. There is no reason to trap an employee or force them to change careers. People should be free to work for whomever they please and talent needs to move freely for the economy to remain efficient.

Companies argue that non-compet]ion agreements protect their secrets and prevent employees from leaving and transferring vital information to competitors. But this agreement misses the mark. First, if a company wants to keep its employees from joining competitors, it should keep them happy so they don't want to leave. Second, very few companies have real secrets and those few companies that do have genuine confidential information can protect it with other agreements. Binding employees with non-competition agreements destroys the competitive engine that drives vibrant economies. They are bad for everyone - even the companies that use them are hurt because they are not motivated to create a positive work environment that will retain employees out of loyalty. Instead the companies shackle their employees with non-compete agreements.

A lot of the severance packages that I see say that the executive has "resigned" her position. But this is a fallacy because severance packages are typically only provided to executives who are terminated. People who resign are not usually provided with severance packages because they leave voluntarily. Severance pay is used to ease the transition for executives who are asked to leave the company. So what is going on here? Why do they sometimes call it a resignation when clearly it is a termination?

People feel better if their departure is called a resignation and they don't object. But this sugar coating can prevent you from getting unemployment benefits. In New York and most other states, a person who resigns is not entitled to unemployment benefits.

If you sign a severance package that says you resigned, your employer can use that agreement to deny your application for unemployment benefits.

If your severance package says that you resigned, you might want to ask your employer to change that. Remove the word "resigned" and make sure the agreement accurately reflects the fact that your employment was terminated by your employer. You can also ask your employer to include a promise not to contest your application for unemployment benefits.

The employment-at-will doctrine governs most every person who works in America, yet it is widely misunderstood. People think that they have a right to their job or that fairness matters.

Today, for example, I met with a successful executive who works for a well known company. The executive had worked for his company for about 6 years and things were going fine. Then, out of the blue, the company asked him to sign a non-compete agreement that would prevent him from working in his field for 12 months if he left his employer. The executive did not want to sign the agreement because he was thinking of joining another firm in the future. At first he refused to sign it. Then the company told him that he would be fired if he did not sign it.

The executive came into our office today under the impression that his company was breaking the law. He said, "they can't do that right." He almost fell out of his chair when I told him that it was perfectly legal and actually common. He said, "you mean they can just demand that I sign it and they can fire me if I don't."

Then I explained the joys of being an employee at will. I told him that unless he had a written employment contract that said otherwise, he could be fired at any time and for any reason or no reason. This executive was stunned. His eyes widened and he sat there looking at me in shock as if I told him that Barak Obama just got caught cheating with Laura Bush.

The executive faced a dilemma. He had to sign that agreement or get fired. In the end he did what most people do. He signed the non-compete agreement because he needed the pay check - he had kids in college etc....

It is true. Employees do not have the right to keep their jobs. They can be fired at any time and for any reason. They have no right to notice or severance pay or fair treatment. Fairness is not required.

On the bright side, employees have the right to quit at any time and for any reason. It is a two way street. Notice is not required either.

Sex discrimination results in unequal pay for female partners at the large firms. Vivian Chen, author of the Careerist, reports that Temple University and the University of Texas-Pan American completed a comprehensive study of female partner compensation at the 200 largest law firms. The study covered compensation from 2002 to 2007. The conclusion: Female partners are paid less then male partners on average. The study found that the pay disparity is "attributed to discriminatory practices under both disparate treatment and disparate impact analysis." Women partners at the largest law firms, in other words, get hosed.

Ironically, lawyers are key players in the war against discrimination. The goal of our employment laws is to stop discrimination in the work place. But if we lawyers are shown to discriminate against our own, how can we be trusted to eradicate employment discrimination? That would be like hiring ex-cons to police the streets.
But do people really expect lawyers at the top 200 law firms to protect society? Do people expect more from lawyers than others? No.

The huge law firms are not driven by social causes. In fact, most law firms today, regardless of size, are run like businesses. Some smaller firms are motivated by social causes, but they are rare. Law firms today are enterprises designed to generate money for their owners. So there is no reason to expect that law firms would be any different than a bank or an insurance company and therefore employment discrimination will exist in these enterprises just as it exists elsewhere.

There is a problem here. Law is what governs human behavior. If lawyers apply the law then more should be expected of them. They should not be discriminating against each other. They should be examples of better conduct. But today this is just an illusion. Lawyers on a whole are not seen as examples of model behavior. Instead, they are seen driving BMWs. Atticus Finch represents how a lawyer should be. But he was a fictional character. If people like that still exist, they would find it hard to succeed as a partner in a modern top 200 law firm. They would be unable to take time off to defend a poor African American man accused of rape. But if Mr. Finch was a partner in a top 200 law firm, he would probably make sure that his female colleagues were paid equally.

Sexual harassment is in the news today due to the harassment of sports reporters in locker rooms. The latest story is about Ines Sainz in the New York Jets locker room. I am going to be on a radio show today about this subject so I have to do some research on this.

In the case of Ms. Sainz, it does not appear that she was sexually harassed because she said that it did not bother her and that she was not even aware of any offensive conduct. The alleged victim has to feel sexually harassed and since she was not even aware of any harassment, I don't see how this would amount to sexual harassment.

A lot of bonehead jocks and the like are blaming Ms. Sainz for wearing sexy outfits in a locker room. Ms. Sainz is free to wear sexy clothes to work and that does not give anyone the right to sexually harass her. She is a TV news reporter and looking sexy is a job requirement. Looking sexy is not an invitation to sexual harassment. The moronic Fox NFL analyst Brian Baldinger said yesterday that Ms. Sainz was "asking for it" because she looked sexy. This kind of caveman thinking is an embarrassment to mankind. Brian Baldinger should stick to talking about football only and resist the temptation to opine about civil rights. Does Mr. Baldinger think its OK to sexually harass every good-looking woman he sees in a sexy outfit? I would like to see him walk through the streets of New York City. Fox News should that guy.

The more interesting legal question here concerns the application of sexual harassment laws to these situations. Sexual harassment laws generally only protect employees from harassment by their employers. Here, Ms. Sainz was in the NY Jets locker room when the conduct occurred, but Ms. Sainz does not work for the NY Jets, she works for a Mexican TV station. So how could the NY Jets be liable to Ms. Sainz for sexual harassment?

The sexual harassment laws originally were created to protect people from being exploited sexually by their employers. An employee is vulnerable to harassment because submission to sexual conduct can be conditioned on continued employment, raises, promotions etc. There was a need to protect employees from overreaching employers. I do not know if Ms. Sainz is even protected by the sexual harassment laws as she was not in an employment relationship with the NY Jets or the NFL. I will look into this and see if the sexual harassment laws can be extended to cover these situations.

A frequent question from clients seeking advice on negotiating severance is whether or not severance payments effect unemployment benefits eligibility. In New York, a claimant is usually eligible for unemployment insurance benefits while receiving severance payments. However, a claimaint will not be eligible for benefits if he or she continues to receive the full salary and exactly the same benefits that he or she received while working, with the understanding that the salary and benefits will stop if he or she becomes employed elsewhere. In other words, the method your employer chooses to pay your severance could impact your eligibility for benefits. If your severance is paid as salary, and if it is subject to forfeiture in the event that you find employment during the severance period, you will not be eligible for unemployment benefits.

As reported in the Wage & Hour Counsel blog, NY State passed a law designed to protect constructions workers from being misclassified as independent contractors.

The law imposes fines and even jail time for violations.

But this law only protects construction workers. What about all of the other workers in New York who are being misclassified as independent contractors? Why did NY limit this law to only construction workers? This law should apply to all workers who are misclassified as independent contractors.

HP has sued its former CEO to prevent him from working for a competitor, Oracle. HP filed its suit in California and California does not enforce non-compete agreements because that state views them as harmful to society. As such, HP is going to have a hard time stopping Mr. Hurd from working for Oracle. HP may be able to get some of the money or stock back that it paid to Mr. Hurd as part of his severance package, but I doubt HP will be able to stop Mr. Hurd from working for Oracle, not in California. The problem for HP is that if fired Mr. Hurd and now it wants to control what he does. That argument will not work in California.

If this case occurred in New York, the outcome would be different. New York will enforce non-compete agreements. If this was in New York, HP would have included an airtight non-compete clause and made that part of Mr. Hurd's severance package. If Mr. Hurd signed the document that contained the non-compete clause, then he would be held to it. If Mr. Hurd tried to work for a competitor, HP would file suit in the Southern District of New York and obtain an injunction and Mr. Hurd would not be working for Oracle.

But, if Mr. Hurd refused to sign a severance agreement that contained a non-compete clause, then the case could get messy. In NY, most large companies require key personal such as CEOs to sign non-competition and confidentiality agreements and these are enforced. But there is a line of cases in New York holding that non-competition agreements should not be enforced if the company fires with the employee without good cause. Since HP fired Mr. Hurd, there would be a dispute over these issues. Since Mr. Hurd apparently fabricated expense reports, a New York court is likely to find that he was fired for good cause and any preexisting non-compete agreement would be enforced so long as it's scope was reasonable.

My law firm has an office in New York City and in San Francisco, so we routinely deal with the laws of both states. They are different in many ways. California, in my view, is more progressive and protective of the individual while New York favors corporations over the individual. Mr. Hurd's is better off being in California.

The sexual harassment law in New York City is better than the federal and New York State laws. The New York City law is excellent and a credit to the City law makers because it provides genuine protection against sexual harassment. The federal and New York State laws, however, are less effective in preventing sexual harassment because they give companies an easy out. There is one major difference between the New York City law and the Federal and State law.

The New York City law recognizes that sexual harassment victims generally do not report the harassment. If a woman is sexually harassed by a supervisor at work, she knows that reporting the harassment is unlikely to stop the harassment and reporting it will probably ruin her career. The only real option for a sexual harassment victim today is to leave the company. The New York City law recognizes this and there is no obligation to report sexual harassment by a supervisor to the company. Not so under the federal and New York State law.

Under the federal and state law, a woman who is sexually harassed by her supervisor is required to report the harassment to the company. This is an absurd requirement and it proves that federal and state law makers are out of touch with reality. These laws force a woman to commit career suicide just because she is sexually harassed by a supervisor. It almost appears that these laws were created by a bunch of old men who are clueless. Actually, the federal law was created by the US Supreme Court, which until recently was overwhelming male. Now there are two females on the court and maybe they will sway the old men out of their arm chairs and into reality. A more balanced court is needed to create more realistic employment laws.

The Wait A Second! blog recently wrote about a new sexual harassment case in the Second Circuit. The case, Kaytor v. Electric Boat Corp.,is unique because it involves not only sex, but threats of violence and what is more amazing is that the case was once dismissed. Fortunately the higher court reinstated the case.

The court held that sexual harassment cases can be based on certain non-sexual conduct. This case focused on Ms. Kaytor's crude and perverted boss. Here are some of the things he did to her at work:

- Sexually suggestive comments about her body and clothing.

- Leering at her and trying to smell her body.

- Said he wanted to see her dead and in a coffin.

- Threatened to kill her if she complained about him.

- Gave her a sexually suggestive gift (a pussy willow).

- As she was leaving for gynecologist appointment he said that her doctor was going where men would love to go.

- Threatened to choke her.

The court held that these facts add up to a classic sexually hostile work environment even though not all of the conduct was sexual. The combination of sexual comments and threats of violence were illegal. The Court cautioned other courts to resist dismissing sexual harassment cases because they usually involved questions of fact that only a jury can decide.

A New York City judge has held that two beauty salon workers can sue their employer for retaliating against them after they complained about overtime pay. The Court held that prior rulings to the contrary were wrong. See the article entitled NY Court Permits Retaliation Action Based on Overtime. In a separate federal case back in 2007, Higueros v. New York State Catholic Health Plan, 526 F. Supp. 2d 342 (SDNY), the court expressed the same view that retaliation claims under the NY Labor Code are viable. While it possible that the cases could be reversed, it seems unlikely. I suspect that retaliation claims will be allowed in overtime pay cases in NY. It only makes sense that an employee should be able to sue if they are retaliated against for requesting overtime pay. Moreover, retaliation laws are being strengthened and expanded as the courts see these laws as a vital part of the overall employment law framework.

At our law firm, we frequently talk to employees who are upset because their employers refuse to provide overtime pay. Most everyone we talk to is afraid of retaliation as most people depend on their jobs to survive. They cannot risk getting fired for asking about overtime pay. Fear of retaliation is probably one of the reasons that overtime pay violations are so widespread - people are afraid to complain. Wage violations are so common that the Obama administration has made overtime pay one of its causes and increased the staff at the Department of Labor.

This ruling in NY allowing retaliation claims in overtime cases is long overdue and hopefully the appellate courts will agree.

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Nursing assistants, licensed practical nurses, janitors and cooks “are particularly vulnerable to wage violations,” said an official for the U.S. Department of Labor. As reported in the NY Times, the U.S. Department of Labor is cracking down on what it perceives as an industry wide practice of wage violations in the health care industry. See the article, Pay Practices in Health Care are Investigated. The article cites several recent settlements such as 1.7M for 4000 health care workers in St. Louis, 2.7M for employees of Partners Health Care System in Boston, and 7.25M for hundreds of registered nurses who worked for Kaiser Permanente in California.

Our law firm just filed a class action against Cigna for its practice of not paying overtime wages to disability clinical case managers. It our contention that these employees are entitled to overtime pay. An article on our case was published yesterday in Law360, a newswire for business lawyers.

Sex discrimination occurs when someone is treated differently on account of their gender. Sexual harassment is a form of sex discrimination. Recent reports on the declining number of women on Wall Street show that women are being treated differently, they are being replaced by men. As reported on Fin.com, Casualties of the Crisis: Stress, Sexism and Layoffs Thin the Ranks of Women on Wall Street.

In the past 10 years, 141,000 women, 2.6% of female workers in finance, disappeared from the industry, while the ranks of men in the industry grew by 389,000, or 9.6%, according to a review of data provided by the federal Bureau of Labor Statistics. The discrepancy is particularly pronounced at brokerages, investment banks and asset management companies.

Ironically, while Wall Street has become more and more of a boys club, the number of sex discrimination and sex harassment charges has dropped. According to the EEOC, "the number of sexual harassment charges in finance, insurance and real estate has decreased by roughly half from 2005 to 2009 -- from 287 to 119." See Sex Harassment Still a Problem in Finance, Despite the Numbers. Why is that woman have stopped complaining while their jobs are being taken by men? New York Post Gossip Columnist Cindy Adams explained the reason recently when she said that women need to keep quiet and "learn to deal with it."

With good jobs hard to find, it may be that woman are more reluctant than ever to complain. At my employment law firm, we get less calls now about sex harassment and sex discrimination. Many of the women we speak to have accepted Cindy Adams advice, they have learned to deal with it. They accept that sex harassment and sex discrimination are part of life on Wall Street and they also know that complaints will only ruin their careers and not fix the problem.

The system frequently works against those who try to use it. I cannot tell you how many human resource people I have deposed or interviewed in cases with clear evidence of sex discrimination or sex harassment and the HR person says that their investigation found no signs of misconduct. Their investigations are designed to find no such evidence. If you get close to the process, you can see that the system is a really a joke. It is a rigged system designed to protect the company, not the employee. Does anyone really think that an investment firm is going to create a system designed to harm itself in favor of an employee?

Women cannot be blamed for taking Cindy Adam's advice. They are not being complacent. They just accept reality - they are not well protected by the law. The laws designed to protect women don't work. They need to be fixed. If they worked, Cindy Adams would not be telling women to just deal with it and we would not see statistics showing stark gender bias on Wall Street. Men discriminate against women on Wall Street because they can. Real change will not occur until laws with teeth are created.

New York just passed an employee rights law that protects nannies and other domestic workers. It is the first of its kind. It protects nannies, caregivers, housekeepers and other in-home workers from sexual harssment, race discrimination and most all other forms of discrimination. It also gives them the right to overtime pay and the right to one day off per week. There is a detailed explanation of this law at Littlerlaw.com by Steven A. Fuchs.

Before this law passed, many domestic workers were unprotected because the employment discrimination and overtime pay laws only applied to larger employers. Small family operations were not covered, this left domestic workers unprotected. The New York City Administrative Code, for example, does not apply to any operation that has less than four employees.

In the past, at our law firm, we would hear stories of sexual harassment and other employer abuses involving domestic workers, but there was nothing we could do other than suggest that they call the police. In one case I remember, a domestic worker had photographs of her boss, a wealthy designer, walking around the house in the nude and engaged in highly illegal workplace behavior. Where is that case now? Wow, too bad this new law did not exist then. Now there is a solid law that protects against this kind of abuse.

Also, I think that domestic workers are more vulnerable to sexual harassment and abuse because they often work in close quarters with their employer. If problems develop, there is no one to turn to for help. There is no human resources department and before this law, there was no protection other than the criminal laws. This is a much needed new law.

Sex discrimination on Wall Street is on the rise. Wall Street is a boys club and shows no signs of changing. The statistics show that the number of woman working on wall street dropped by 16% over the past decade, while the number of men on Wall Street increased by 7%. However, the number of women in the overall national workforce increased by 4% over the same period and number of men joining the overall workforce fell by half a percent. Look at the graphs illustrating this trend at Fincom and their article, The Changing Face of Wall Street. The data comes from the U.S. Department of Labor and it shows that women are disappearing from Wall Street and being replaced by men.

The statistics show that more women than men are entering the workforce, except on Wall Street. Wall Street is still stuck in a male dominated culture such as that portrayed in Mad Men. I suspect that we could still find real life Don Draper's on Wall Street complete with the trophy wife at home in the suburbs and the secretary that sends out his dry cleaning.

It is probably easier for a woman to join the Army than to work on Wall Street. The military has changed it's culture, so why is Wall Street so behind the times? If you want to share your thoughts, please send me an email at robert@ottingerlaw and I will post some comments.

In executive compensation disputes, an executive can gain substantial leverage if the subject compensation, typically a bonus, can be classified as "wages" within the meaning of NY Labor Code section 190(1). If the bonus constitutes "wages," then the bonus is protected against any meddling by the employer and must be paid in full pursuant to section 193 of the Labor Code. In New York, and most other states, wages are protected and must be paid promptly.

New York defines wages as "the earnings of an employee for labor or services rendered, regardless of whether the amount is determined on a time, piece, commission or other basis." This definition sounds wide open and surely seems to cover most bonus plans as bonuses are certainly "earnings for labor or services rendered." See section 191(1). But this language has been read to exclude certain "incentive compensation" that is paid as profit sharing or as earnings that are contingent on the financial performance of the business.

The courts in New York have held that a bonus will be deemed wages only if the bonus compensation is directly linked to the executive's own performance. However, if the bonus compensation is based on other factors such as the financial success of the business enterprise or based on other discretionary factors, then the bonus is "discretionary compensation" and therefore does not constitute wages under the Labor Code. See Truelove v. Northeast Capital & Advisory, Inc. 95 N.Y.2d 220 (2000). But this does not mean that the bonus claim is lost. This only means that the executive's bonus is not protected by the New York Labor Code. The executive may still have a solid legal claim to the unpaid bonus under a breach of contract theory.