Lawyer to Lawyer Newsletter
June 2016
Dedicated to providing fellow lawyers, as well as accountants and other business advisers, with the latest news on the developing law of the workplace, written by nationally recognized lawyers who are committed to representing employers exclusively in matters of labor, employment, immigration and human resources law.
From the Desk of James B. Sherman, President/CEO:
Employment agreements that restrict employees from working for a competitor after they leave or are fired, have become increasingly common. 

Indeed, these agreements have become so prevalent in today's workforce that they are coming under fire from an unlikely source - state attorneys general, through lawsuits!  Perhaps this new (and disturbing) trend should not come as such a surprise.  With so many employees being required to sign restrictive covenants as a condition of employment, it is getting harder and harder for them to leave their jobs for another in their chosen field.  Similarly, employers looking to hire are seeing the pool of qualified applicants diminished by the fact that many are saddled with post-employment restrictions from an agreement with their prior employer.  Hiring an applicant with a known noncompetition agreement exposes the hiring employer to a lawsuit for "tortious interference" with the former employer's contract.  However, until recently, employers that placed unreasonable restrictions on employees merely risked having their noncompetition agreement deemed unenforceable, but only if/when  they  chose to attempt to enforce the agreement in court.  While theoretically, an employee who signed such an agreement or perhaps a prospective employer interested in hiring that employee can file suit asking the court to declare that an overly broad agreement is unenforceable, this rarely happens.  Few employees have the financial resources to pursue such an action and few interested employers care to invest money in a lawsuit over a job applicant; however, this is not the case when it comes to state governments and their attorneys general.  Just in the past year, states have begun suing employers in court over their alleged unreasonable use/overuse of non-compete agreements.  Illinois became the most recent state to join this trend when Attorney General Lisa Madigan, filed a lawsuit against sandwich maker Jimmy Johns, in Illinois state court on June 8th.  Employers in and around Minnesota should take notice of these government lawsuits because the legal theories relied on in Jimmy Johns' case and other cases recently filed around the country, could just as easily apply in Minnesota, Wisconsin and most other states!

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8th Circuit Clarifies Definition of a "Report" Protected under Sarbanes-Oxley Act
Employees of publicly traded companies are protected from retaliation for reporting "any conduct which the employee reasonably believes constitutes a violation of" rules or laws regarding fraud against shareholders.  This includes internal reports made to a supervisor or another individual with investigative authority in a company.  Because of this, employers are often afraid to touch an employee who has made a complaint or report.  However, not all reports or complaints qualify for protection; the employee's belief must be both subjectively reasonable (i.e. the employee sincerely believes the law is being violated) and objectively reasonable beyond what the employee may think.   Recently, the Eighth Circuit Court of Appeals clarified what constitutes a protected, "objectively reasonable" report, to support a claim under Sarbanes-Oxley. The court held that a plaintiff employee must prove that "a reasonable person in the same factual circumstances with the same training and experience would believe the employer violated securities laws."  Applying this standard to the facts of the case, the court affirmed the dismissal of the employee's complaint. 
Thirty years after sexual harassment was recognized as a form of illegal sex discrimination in Meritor Savings Bank v. Vinson, workplace harassment remains a persistent problem: in fiscal year 2015, approximately one-third of charges of discrimination filed with the EEOC included an allegation of harassment, and likely most instances of harassment are not reported, either internally or to a government agency.  To address this issue, the EEOC released a report on harassment in the workplace, stating the business case for preventing and stopping harassment-including legal costs; employee morale, health, and productivity; turnover; and reputational harm-and provides some recommendations for doing so....
Minneapolis Passes Paid Sick Leave Ordinance
Minneapolis became the first city in Minnesota to require that covered employers provide paid sick leave to their eligible employees.  Beginning July 1, 2017, private employers with 6 or more employees, anywhere, will be required to provide paid sick leave, and smaller employers will be required to provide unpaid sick leave, to their Minneapolis employees.  Under this ordinance, employees who work for an employer for at least 90 days, and for a minimum of at least 80 hours within Minneapolis city limits, will be eligible.  The amount of paid sick leave each eligible employee may take shall accrue at a rate of one hour for every 30 hours worked, up to a maximum of 48 hours per year.  Additionally, up to 80 hours of unused sick leave may be carried over from year to year. St. Paul currently is exploring a similar ordinance for that city....
Discrimination against transgender individuals in their workplaces, as well as in the public, is an issue many companies are currently dealing with.  Especially with the issue of bathroom access, many employers struggle to balance the privacy concerns of cisgender employees, some of whom may be wary about sharing restrooms, with the rights of transgender employees, for whom using a restroom that conforms with their gender identity is an important aspect of their transition.  Although Title VII of the Civil Rights Act of 1964 does not explicitly outlaw discrimination on the basis of gender identity, both the EEOC and the Department of Justice have taken the position that companies and laws that restrict transgender individuals' access to public restrooms such as North Carolina's controversial bathroom law, violate the law.  North Carolina and the Department of Justice have both filed federal lawsuits to determine whether the law is discriminatory. 
Expanded Workshop Helping Employers Prepare for New DOL Overtime Rule
Presented by Wessels Sherman shareholders 
James B. Sherman, Esq. and Sean F. Darke, Esq. 

Due to the success of our initial, timely webinar on the new Department of Labor Overtime Exemption Rule, we are hosting an  extended workshop to prepare you for the changes coming when the rule goes into effect December 1, 2016.  

Cost:  $100 per person  
Location: Online

Wessels Sherman's annual full-day seminar on the latest developments in workplace law, returns to Minnesota in 2017!

Our clients, friends and business professionals of every sort (from owners, to HR managers, CPAs, attorneys, etc.) from all over the Midwest and beyond, have come to look upon our firm's annual seminars with great anticipation as they typically attract upwards of 200 people.  Therefore, it is never too early to get word out on the next big event!
In 2015, our Chicago seminar had keynote speakers from both the NLRB and the EEOC and this year's seminar in Milwaukee, in May, was another huge success. For 2017 the seminar returns to Minnesota where we plan to have an amazing slate of the very latest topics in labor and employment law, along with special guest speakers.  Here are some of the early particulars for 2017:
Location - Radisson Blu, MOA (the hotel is actually connected by skyway to the world famous Mall of America!)
Date - Friday, April 28, 2017
As is our custom, we expect a full day of cutting edge presentations for which educational credits will be available; e.g. HRCI, CPE, CLE for MN, WI, IL, and IA.  Feel free to submit topics of special interest for consideration since details are still in the works.
Attendees can expect the usual mix of learning, socializing and fun with door prizes and, of course, shopping available at the largest mall in America!  A block of rooms has already been booked with special rates for attendees who will be traveling to this event and/or those who wish to bring the family and stay for a weekend to, as the saying goes, "shop till you drop."

About Us
We regularly work with other lawyers, accountants and business advisers as a trusted resource for their clients, whether as co-counsel, local counsel (from any of our 5 offices in MN, WI, IL or IA), or referrals in our concentrated area of practice. Your client relationships as a referring professional are highly respected. Our goal is to provide your clients with exceptional and cost conscious representation in our concentrated area of practice.


James B. Sherman, Esq.
Wessels Sherman
Contact James Sherman at:
(952) 746-1700