Employer Not Responsible For Employee Data Safekeeping

You start your job and give your employer all your personal information: your home address, social security number, perhaps even confidential medical and financial data. Did you know your employer has no duty to keep your confidential information safe from hackers? In a recent 2 – 1 vote, a three-judge panel of the Pennsylvania Superior Court ruled that employers cannot be held responsible for a data breach of employee information even if the employer was not utilizing current best practices to prevent a breach.

In the case of Dittman v. University of Pittsburgh Medical Center, decided January 12, 2017, the names, addresses, birthdates, salaries, social security numbers and other valuable data of 62,000 employees were stolen from University computers. The breach resulted in as many as 788 employees falling victim to tax fraud and identity theft. Yet, the court’s majority concluded that since data breaches are widespread and cannot be prevented entirely, it should not create a rule that would force employers to spend significant sums on technology when data breaches remain an unavoidable hazard.

 

The court did not evaluate the technology UPMC had in place, its cost, or the cost of more expensive measures that might have prevented the breach. In a stinging dissent, Judge Musmanno chided the majority for failing to even allow the plaintiffs the opportunity to demonstrate the University was aware of the threat of cyberattacks and did not act reasonably within budgetary constraints to safeguard employee information.  The Dittman decision has far-reaching implications.  To the delight of hackers, it may encourage some employers to spend less on data security, or at least on the security of data that doesn’t affect the employer’s bottom line if it is compromised. Look for this one to go up to the Pennsylvania Supreme Court. In the meantime, employees might want to spend a little themselves on LifeLock or similar services to protect their confidential information.

A NON-COMPETE WITHOUT PAY? NONSENSE.

It is well established in Pennsylvania law that a non-competition agreement signed at the beginning of employment is enforceable if it is reasonable in its duration and scope. Yet, employers often attempt to compel employees to sign non-competition agreements after the employment has begun. Perhaps the employer overlooked the document during the hiring process. More likely, the attempt comes much later when the employer suddenly realizes the potential impact to its business if a key employee should leave.

Employers in Pennsylvania are required to offer an employee more than just continued employment to enforce a non-competition agreement signed after employment has begun. In Socko v. Mid Atlantic Systems of CPA, Inc., decided by the Pennsylvania Supreme Court in November 2015, the defendant employer foolishly decided the non-competition agreement its salesman, David Socko, signed in 2009 when he was hired wasn’t strong enough. In 2010, it asked him to sign a far more restrictive agreement. The agreement specifically noted that it superseded all prior agreements. Mid Atlantic did not extend Mr. Socko any additional benefit for signing the agreement, not a raise, not a bonus, not an extra week of vacation. When Mr. Socko left to work for a competitor in 2012, Mid Atlantic attempted to enforce the 2010 agreement.

The Supreme Court held the 2010 agreement was unenforceable because Mid Atlantic did not provide Mr. Socko “consideration,” a valuable benefit, in exchange for signing the agreement. Because non-competition agreements have historically been looked upon with disfavor in Pennsylvania jurisprudence, the Supreme Court ruled that an employee is entitled to challenge a non-competition agreement for a lack of consideration even if the agreement contains language which states the employee intended to be legally bound by the agreement. Moreover, the language in the 2010 agreement that superseded all prior agreements prevented the employer from relying upon the less restrictive agreement signed at the beginning of the employment in 2009.

What if an employee refuses to sign a non-competition agreement even if the employer offers a valuable benefit in exchange? Unfortunately, in the employment-at -will environment, a refusal to sign a non-competition agreement properly supported by consideration is not legally protected. At least Pennsylvania employees are entitled to be compensated for agreeing to restrictions. In contrast, the New Jersey Supreme Court has held that continued employment itself is sufficient consideration for a non-competition agreement presented after hiring.

 

If you are presented with a non-competition agreement and have questions, call Scott Fegley at the Fegley Law Firm in Yardley, PA, (215) 493-8287 or email him at scott@fegleylaw.com. Mr. Fegley will help you make an informed decision about whether to sign a document that may restrict your ability to work for another employer.

New Ordinance Targets “Wage Theft” By Philadelphia Employers

 

Philadelphia recently enacted a local ordinance which will make it easier for employees to collect small sums owed to them by employers. Employees owed from $100 to $10,000 can submit a claim to the new “Wage Theft Coordinator” in the city government. The Wage Theft Coordinator will have the power to review claims, make determinations, and impose substantial penalties including fines and revocation of city licenses or permits held by the employer.

In addition to ordering payment of the back wages, the Wage Theft Coordinator may impose a fine of up to $2,300 per violation. Each week that wages go unpaid is considered a separate violation. Like the Pennsylvania Wage Payment & Collection Law, the city ordinance provides for individual liability against company owners and persons in charge of the purse strings even in a corporation. Failure to pay the wages and fines after a violation is found may lead to even more severe penalties including publication in a list of non-paying employers, possible imprisonment of company officials, and revocation or suspension of city licenses or permits for up to one year.

The claim must be for work performed in Philadelphia or where the employment contract was created in Philadelphia. For companies with offices in Philadelphia, that may expand potential liability under the new ordinance to workers anywhere. Philadelphia employers are also required to post new notices in the workplace informing employees of their rights under the new ordinance.

If you are an employee who is owed back wages from your employer, or an employer wanting to stay compliant with wage laws, call Scott Fegley at the Fegley Law Firm in Yardley, PA for assistance. (215) 493-8287 or scott@fegleylaw.com.  We give you peace of mind.

Medical Marijuana: A Joint Impact On Employers And Employees

On May 17, 2016, Pennsylvania became the twenty-third state, along with the District of Columbia, to legalize the use of marijuana for treatment of persons with serious illnesses. The full implementation of the Medical Marijuana Act (MMA) will not occur for some time. The Pennsylvania Department of Health (DOH) has been charged with the task of developing regulations for facilities to legally dispense medical marijuana. It may be several months before the regulations are in place, dispensaries are licensed, and the first medical marijuana patients are certified to purchase the drug.

Despite the time lag until full implementation, there are several aspects of the MMA’s impact on the workplace that employees and employers should take note of now. First, the MMA does not legalize smoking pot. Medical marijuana will be available only in the form of pills, creams, oils and vapors. It will also be available only to those individuals whose physicians have certified them to be suffering from specific serious illnesses such as cancer, HIV/AIDs, and multiple sclerosis.

Second, the MMA does not permit even approved users of medical marijuana to use it at work or to be under the influence of medical marijuana at work. The MMA specifically states:

Nothing in the act shall require an employer to make any accommodation of the use of medical marijuana on the premises of any place of employment.

                                                            and

This act shall in no way limit an employer’s ability to discipline an employee for being under the influence of medical marijuana in the workplace or for working while under the influence of medical marijuana when the employee’s conduct falls below the standard of care normally accepted for that position.

So if employers do not have to permit possession or use of medical marijuana at work and may discipline an employee for being under the influence of medical marijuana, what real change does the law have on the workplace?

For starters, employers should anticipate some creative plaintiffs’ lawyers will argue that the above language does not permit discipline in circumstances where the employee, though perhaps “under the influence,” remains able to effectively perform his job. Only time and litigation will tell. The more difficult aspect of implementation may occur with an employer’s random drug testing program. A positive test for cannabis may not necessarily, in and of itself, be a basis for discipline or discharge of an employee as it was prior to the law’s enactment. However, persons approved for medical marijuana use will receive a state issued ID card. If an employee cannot produce a state ID card to verify approval for medicinal use, the employer should be able to discipline the employee the same as any other employee under a zero tolerance drug and alcohol policy.

The MMA also prohibits employers from discriminating against employees solely on the basis of the employee’s status as a certified user of medical marijuana. Yet, employees who are certified to use medical marijuana are, by definition, already afflicted with illnesses which themselves will likely justify the exercise of rights and protections available under the Americans With Disabilities Act and/or the Family & Medical Leave Act. Once an employee identifies himself or herself as certified to use medical marijuana, employers should exercise particular diligence to assure accommodations are made, short of possession or use of medical marijuana on the premises, to enable the employee to perform his or her job. However, it bears repeating that even certification for use of medical marijuana will not excuse an employee’s subpar performance or coming to work impaired.

If you have questions about employment law and how it may apply to you or your business call our Yardley, PA office to schedule a consultation.  Contact us at (215) 493-8287 or email Scott Fegley at scott@fegleylaw.com.

Read Before You Sign! (And Consult An Attorney)

The recent case of Wakeley v. M.J. Brunner, Inc., PA Superior Court, No. 392 (April 19, 2016) is another harsh example of what can happen to people who sign legal documents without understanding what they mean.

The plaintiff, Ms. Wakeley, was happily employed at her job in Dallas, TX when a corporate recruiter contacted her regarding a position with the defendant, M.J. Brunner, in Pittsburgh, PA.  After a series of interviews, M.J. Brunner offered Ms. Wakeley the position, but then revoked the offer before Ms. Wakeley accepted citing a change in plans.   This should have been a red flag for Ms. Wakeley.  However, a short while later, the Brunner company called again and told Ms. Wakeley they had an executive taking a maternity leave.  They offered her the temporary position with slightly more attractive compensation than the original offer and the promise that there would be another similar permanent position for her when the executive returned from maternity leave.  Ms. Wakeley accepted the offer, moved her family from Dallas to the Pittsburgh area, and began working for M.J. Brunner.  When she started her new job, she signed a contract which included a standard “at-will employment’ clause.  For anyone not familiar with “at-will employment,” it means either the employer or the employee can terminate the employment relationship “at will” at any time for any reason or even no reason at all.

Ms. Wakeley’s tenure at M.J. Brunner, Inc. was short-lived.  Her superiors criticized her work performance and fired her four days before the incumbent executive returned from maternity leave to resume her position.

Not surprisingly, Ms. Wakeley brought a lawsuit against M.J. Brunner.  She argued she should not be considered an “at-will” employee because she suffered the additional hardship of relocating across the country.  She also claimed M.J. Brunner never intended to offer her a permanent position and fraudulently lured her to leave her job in Dallas just to cover the executive’s maternity leave.  However, the court held that the language in Ms. Wakeley’s contract was “clear and dispositive.”  She could not claim to be anything other than an “at will” employee when she signed a contract including the “at will” language and clearly identifying the employer’s  right to end her employment at any time for any reason.  The contract also stated that no M.J. Brunner employee had the authority to make any oral statement to the contrary.  The court held the contract language controlled despite what M.J. Brunner representatives may have said orally to her prior to signing the contract.  The court presumed Ms. Wakeley had read the contract and understood its terms.

Whether you are presented with a contract upon starting your employment or a severance agreement when you leave, if you sign the agreement without seeking legal counsel, you do so at your own peril.  Frankly, this advice is good advice for anyone given a legal document to sign.  Severance agreements may contain non-competition clauses that can prevent an employee from accepting a job offer from a new employer.  Business contracts may include many burdensome clauses that limit your legal rights and may even compel you to bring your lawsuit in another state.  In short, if you sign a legal contract without seeking legal advice, you may find yourself in Pittsburgh without a paddle.