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April 2015 Archives

Fired employee files whistleblower lawsuit against ex-employers

One of the simplest ways for an employer to avoid some potentially headache-inducing legal action is to respect the rights of its current and former employees. Doing anything unethical or in violation of the rights of these people will practically assure you and your company of a lawsuit. Even though it may sound patronizing to hear that last sentence, ethical and employee rights violations happen all the time, so this lesson sadly needs to be repeated.

Look no further than a whistleblower lawsuit that involves the Georgia State Lottery. A former employee of the lottery was a high ranking official, and he was asked to present manipulated sales numbers for a presentation to the lottery's board. He informed his bosses that the numbers weren't right and he objected to this notion, but the presentation went ahead anyway.

Then, just a week later, he was fired from his job because "misleading information" was distributed to board members. The employee was understandably frustrated and filed a lawsuit because of the state lottery's "unethical and illegal" actions. At best, the state lottery was trying to shift blame for the presentation to this employee. At worst, the state lottery was trying to cover up their own failings.

The employee is not only suing the state lottery, but the president of the lottery specifically, Debbie Alford. She was one of the people that pressured him to present the flawed numbers, so the employee alleges.

Retaliatory acts towards employees and unethical behavior towards whistleblowers are legal nightmares for companies. So it is best to even avoid letting them happen in the first place. Respect your employees and uphold their rights to facilitate a happier -- and far less legally-murky -- work environment.

Source: Atlanta Journal Constitution, "Former top lottery official files whistleblower lawsuit," James Salzer, April 23, 2015

The importance of non-compete contracts for businesses

Imagine that you are an employer, and you have to make some difficult decision about your employees. Lay-offs are happening, and so you have to pick a few candidates to get rid of, even though you may not really want to do it. As you let the last few go, you feel a twinge of disappointment -- and yet also a twinge of security. These are talented people you are letting go of, and they have built up tremendous knowledge of your company's ways and clients.

So why do you feel secure? Well, that's where a non-competition agreement comes into play. Most companies utilize non-competes to ensure that their ways and secrets aren't given to a competitor via a former employee. Non-competes can also restrict a former employee's ability to work for a competitor of the company.

Non-competes can be signed at any time, and they do hold significant value for the employer. Of course, given the restricting nature of these contracts, non-competition agreements often come under significant scrutiny should an employee contest the document's validity. The courts will certainly look at the document with a keen eye.

So, any employer will want to ensure that their documents are as close to "ironclad" as they possibly can be. One key aspect of non-competes is their "reasonableness." In other words, if, as an employer, you make an employee sign a non-compete that doesn't seem to serve a rational purpose or if the agreement's restrictions fail to observe some semblance of a reasonable timeline, then the contract will not be deemed "reasonable."

In this regard, duration and scope are two of the biggest factors. As an employer, you certainly have legitimate concerns and needs when dealing with an employee who is signing a non-compete. Just make sure that in relation to the duration of the non-compete and the scope of the non-compete that you are being fair and reasonable.

Source: FindLaw, "Non-Competition Agreements: Overview," Accessed April 7, 2015

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