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Points of Business Interest – April 2003

Points of Business Interest

»» US Supreme Court kicks a crutch out of the Americans with Disabilities Act

US Supreme Court recently ruled that an employee’s carpel tunnel syndrome, acquire on the job, which makes it difficult for her to do her job but does not effect her ability to care for herself off the job does not render her disabled within the meaning of the American with Disabilities Act. The court held that the requirement in the ADA that the injury affect major life activities means that the central inquiry must be whether the person is unable to perform the variety of tasks central to most people’s lives, such as household chores, bathing and brushing one’s teeth.

»» Post your Notices

The Family and Medical Leave act of 1993 (FMLA) requires and employer to post a FMLA notice and advise the employee regarding eligibility. In a recent case handed down by the Circuit Court of Appeals, the employer’s failure to post the FMLA notice and inform the employee that she was ineligible for paid leave under the FMLA, constitute a material misrepresentation, even though the employer intended no deception. A lesson to be learned is that there are a number of notices which the statute requires employers to post, such as minimum wage, FMLA and the like. It is essential that these notices be posted in an area where the employees are certain to see them.

»» More Carping on Internet Security

As more businesses spend more using e-mail and the Internet, it is essential to be concerned for your company’s security. Some suggestions are to delete the cookies often which are small files inserted when you visit a website into your hard drive, which may contain profiling information and personal preferences on your business. They should be deleted regularly, or you can set your browser to block all cookies or ask you first. Another option is to purchase a cookie management program, like cookie crasher from TheLimitsOff.com. Do not be fooled by some advertisers that reportedly allow you to opt out of their identification-tracking cookie. This usually results in replacing a unique cookie with a generic one. You should also make sure you have firewalls to keep people from attacking your system. Hardware firewalls are designed to keep intruders from coming in, but they do not always stop your programs from sending data back out. Software firewalls can help with this.

One of the most important things you can do is purchase and regularly update your anti-virus program. We update ours weekly, to make sure we are protected. The data on your hard drive and/or server can represent the operational lifeblood of your company. The modest cost in time and money of a well-maintained anti-virus program is a bargain. Finally, office suite programs, such as those from Microsoft and Corel contain a lot of hidden information, such as data on the author, prior revisions, hidden text or cells, comments and the like. Programs are available to do metadata removal before sending out these documents. Without it, it is relatively easy to access this information, which can include comments on strategy and the like in offers, proposals and other documents you send out.

»» The Truth About Polygraphs In The Workplace

Under the Employee Polygraph Protection Act, 29 U.S.C. 22

2001(4) (the “Act”), a polygraph is defined as an instrument that:

records continuously, visually, permanently, and simultaneously changes in cardiovascular, respiratory, and electrodermal patterns as minimum instrumentation standards; and is used, or the results of which are used, for the purpose of rendering a diagnostic opinion regarding the honesty or dishonesty of an individual.

This procedure is used to determine truthfulness or deception, and such a determination can be helpful in the workplace. However, please be aware that under the Act there are clear-cut restrictions as to who is allowed to administer such examinations, the manner in which the examinations are to be administered, and under what circumstances. Employers have specific regulations to follow when attempting to proceed under this Act.

An employer should know, at the very least, that under the Act it is unlawful to directly or indirectly require or even suggest that an employee (or an applicant for employment) submit to a polygraph examination as a condition of employment. At the same time, the Act provides that employers may request polygraph examinations in connection with an ongoing investigation of suspected theft or other specific actions that resulted in an economic loss or injury to the employer’s business.

Notably, when such requests are allowed, the employer must adhere to very stringent guidelines before, during, and after the administration of the examination. Any violation of those guidelines may be punishable by civil penalties up to $10,000, and that the employer may also be liable to the affected employee for such legal or equitable relief in court.

This Act has no application to governmental employers. Some security employers and other employers in the businesses of manufacturing and/or distributing hazardous or otherwise controlled substances or protecting the public health are also exempt.

»» Be Careful Who’s Bluff You Call

Covenants not to compete, whereby an employee agrees that he or she will not work for or start a competitive business, are traditionally not favored by the law, though they are enforced in proper circumstances. Two recent cases highlight that covenants not to compete should be carefully considered and drafted. In a case decided last year by the U.S. Seventh Circuit Court of Appeals, an employer became involved in a dispute with a competing business. The employer decided to require all managers to sign an employment agreement that included a “draconian” non-compete provision. The employer refused to negotiate the terms of the agreement and terminated for cause employees who refused to sign it. The Plaintiff employee, on the advice of her attorney, refused and was terminated. Although she was forty-seven year old female, and was replaced by a thirty-two year old male, she presented no direct evidence of discrimination, and her termination was upheld.

»» More on Covenants Not to Compete

In a case that did not break new ground, an insurance agent who had relationships with friends and family prior to his employment, whether he sold them insurance before his employment or not, was entitled to continue to sell to them in spite of the not to compete agreement after he left work for a different employer. The court held at law that the former employer had no protectable interest in customers known to the former employee before his employment.

»» There’s a reason we send you those letters on annual reports.

Shareholder/officer of a corporation signed a promissory note as officer of the corporation. The corporation was thereafter dissolved but the shareholder who signed the note as officer was held personally liable under the note, even though the corporation was subsequently reinstated. When annual reports are not filed, and the corporation is involuntarily dissolved by the Secretary of State, it creates personal liability for those officers who signed obligations. It is essential that the corporate formalities, including the annual reports, annual meetings/informal actions in lieu of meetings, and the like be followed to protect the corporate insulation from liability.