HR Matters
Texas SHRM
2/2 – Government Affairs CLA Webinar @ 4:00 ET To join the meeting: http://shrm.adobeconnect.com/gafeb2/ Call-in: (800) 745-6370; Participant Pass Code: 738157
2/9 – Membership CLA Calls: State Councils @ 1:00 ET Call-in: (800) 745-6370; Participant Pass Code: 747279 Chapters @ 2:00 ET Call-in: (800) 745-6370; Participant Pass Code: 747279
2/15 – College Relations CLA Call @ 2:00 ET Call-in: (800) 745-6370; Participant Pass Code: 214935
2/22 – Diversity & Inclusion CLA Orientation Webinar @ 4:00 ET To join the meeting: http://shrm.adobeconnect.com/divfeb22/ Call-in: (800) 745-6370; Participant Pass Code: 738157
2/28 – HR Certification Institute Certification CLA Webinar @ 4:00 ET To join the meeting: http://shrm.adobeconnect.com/hrcifeb28/ Call-in: (800) 745-6370; Participant Pass Code: 738157
An employer may need to accommodate someone who can’t perform essential job functions. Guidance from the U.S. Equal Employment Opportunity Commission (EEOC) indicates that employers are required "to provide reasonable accommodation to qualified individuals with disabilities who are employees or applicants for employment, except when such accommodation would cause an undue hardship." Further, employees must possess the knowledge, skills and abilities to be able to perform the essential job functions with or without reasonable accommodation.
"Essential" job functions are those critical elements that must be performed to achieve the objectives of the job.
When employees with disabilities have difficulty performing essential job functions, employers should first consider what, if any, reasonable accommodations might be necessary.
New federal regulations implementing the 2008 amendments to the Americans with Disabilities Act (ADA) went into effect in March 2011. These regulations expand the definition of the term "disability," which should result in employers focusing more on their responsibilities for accommodating employees.
The EEOC’s recommended interactive accommodation process still involves reviewing essential job functions and determining how the employee’s disability impacts his or her ability to perform them. In addition, the Society for Human Resource Management has developed a guide on "How to Handle an Employee’s ADA Request for Reasonable Accommodation" to assist employers with the accommodation process.
Once employers have completed the interactive process and provided accommodation, some may think no further action is needed. Employers may become frustrated when, after spending time and money providing accommodations, employees continue to wrestle with performance problems. At this juncture, employers may need to ask if it is necessary to revisit the interactive process again.
Perhaps the basis for the performance problem is a knowledge or skill deficiency and additional coaching or training is needed. Or perhaps a transfer to another vacant position needs to be explored. The ADA permits all of these options. Once the interactive accommodation process has been completed, employees with disabilities may be held to the same performance and conduct standards as other employees as outlined in the EEOC guidance titled "Applying Performance and Conduct Standards to Employees with Disabilities."
As a professional member of SHRM, you can receive free, exclusive access to the HR Knowledge Center. Our advisors have many years of HR experience and a wide variety of resources to assist you with your HR questions. You may reach the Knowledge Center at (800) 283-7476, Option #5 or by using the HR Knowledge Center Request Form.
The 2012 SHRM-TSC Global Conference will be taking place on Thursday, February 9 at the Hilton Houston North in Houston, Texas. We hope you will plan to join us. The conference has been approved for 6.5 hours of general credit or 5 hours of GPHR and 1.5 hours of general credit (whichever you prefer).
Who should attend?
A typical attendee will work with global HR in either a large or small capacity. Whether you work as a generalist, in global tax, compensation, benefits, finance, or manage international assignments, you will have a chance to learn something from experienced HR practitioners. This conference is designed for all size companies that deal with questions regarding hiring foreign nationals or sending employees to work in other countries for short-term or long-term projects.
Many of our attendees will have responsibilities for HR outside of the U.S., requiring knowledge of HR functions in several countries. Their challenges and concerns vary from one corporation to another. Some are concerned with the concept of "Think Global, Act Local," while others are more concerned with other countries employment practices and cultural differences.
No matter which of these areas are of greatest focus for the prospective attendee, their organizations must develop globally experienced employees trained to take advantage of expanding global markets.
There will be something for everyone at the conference and we look forward to you joining us for a fun day of education.
For Registration information visit http://www.tscglobalconference.org/.
*Ensure that you are signed up for direct deposit for Chapter Financial Support Payments (CFSP).
*Ensure that the chapter is using the correct "affiliate of" SHRM logo with the registration mark (® not TM).
*If there have been any changes in your volunteers, report them to your Regional Administrator.
*Keep SHRM informed of any changes to volunteer e-mail addresses, contact information and role changes.
*Determine who from your board will be participating in state council meetings, the state leadership conference, state annual conference, and the SHRM Leadership and Annual Conference. It is important to put this on your board’s calendars early to guarantee your organization is represented and receive credit for SHAPE. It is preferred that the president or president-elect be the representative.
*Chapter rosters are due to the SHRM-TSC office by February 28.*Chapter dues are to be paid to the SHRM-TSC office by February 28.
On Thursday, February 9, 2012 the Pineywoods SHRM Chapter is partnering with the Nacogdoches County Chamber of Commerce, Stephen F. Austin State University, the City of Nacogdoches, the Nacogdoches Economic Development Corporation, Gen TX, Gear Up, The Daily Sentinel, and the Nacogdoches County School Districts for "Download the Future" day.
This initiative is in conjunction with Nacogdoches County Education Week and seeks to show students in the county the benefits and county wide support of pursuing education after high school — whether it be in a university or technical school setting. For one day, employed individuals provide the knowledge of their field to more than 800 8th grade students.
Why should employers look for the Assurance of Learning Assessment on recent graduates’ résumés? SHRM’s Assurance of Learning Assessment is the new universal benchmark for undergraduate- and graduate-level HR students. After passing the exam, students will receive a Certificate of Learning informing hiring managers that they have sufficient knowledge to enter the workforce. This assessment replaces the PHR certification exam for students because traditional students are no longer eligible to take the PHR under the HR Certification Institute’s eligibility requirements. For more details about the assessment, visit us online at www.shrm.org/assessment
Encourage students to register now for the spring 2012 testing window www.shrm.org/assessment. Questions? Contact the Assurance of Learning hotline at assessment@shrm.org or 1-800-283-7476 x3926 (EXAM). A Preparation Guidebook is also available through the SHRMStore via www.shrm.org/assessment/guidebook.aspx
Juanita Baldwin, Recruitment and Internship Coordinator with the Texas Commission on Environmental Quality (TCEQ), is seeking assistance from corporate sponsors and companies to participate in an internship program. This is a great opportunity for the chapters across Texas to get behind and support a program that promotes both education and veteran-military support. This could be an initiative for your chapter from a Workforce Readiness perspective. Please contact Juanita at 512-239-0105 or Juanita.baldwin@tceq.texas.gov if your company is interested in participating in this worthwhile program. Juanita will handle all the coordination for any interns you want to hire.
Also, please help us spread the word about the internship program, which is outlined below:
You must meet all internship requirements to be eligible to participate. You must have completed at least 60 undergraduate semester hours at the end of the most immediate past fall semester or be a current graduate student enrollee. You must be enrolled full time during the current spring semester and have a minimum academic grade point average of 2.0 on a 4.0 scale at the time of application. You should be enrolled in environmental or other science-related disciplines including, but not limited to, the following: biology, chemistry, geology, engineering, public health, public administration. Students pursuing the following majors are also encouraged to apply: finance, accounting, business, computer science or law.
How Do I Apply?
1. Submit an online application form. Applications accepted January 1 - March 31, 2012. 2. Submit all of the following supporting documentation: a professor's letter of recommendation current official academic transcript (legible copy is acceptable) verification of spring 2012 enrollment
E-mail documentation to: jobs@tceq.texas.gov
OR
Mail documentation to:
Mickey Leland Internship Program, MC 116
Human Resources and Staff Development Division
Texas Commission on Environmental Quality
PO Box 13087
Austin, TX 78711-3087
NOTE: Complete application packages received by the March 31, 2012 deadline have the best opportunity for review and consideration by sponsors/managers.
Incomplete application packages (for example, missing the online application or related documents) may not be considered.
What is the timeline for the 2012 Mickey Leland Internship Program?
Student Application Deadline March 31, 2012
Sponsors Interview Candidates April - May, 2012
Candidates Notified of Selection April - May, 2012
Intern Assignments End August 31, 2012
2012 Program Concludes August 31, 2012
What are internship expectations?
As an intern, you will be expected to fulfill the duties and responsibilities of the position to which you are assigned. Interns must abide by all policies, procedures, and regulations of the employing agency or organization. This may include drug testing.
Sponsors/mentors will provide you with feedback concerning your performance.
Since passage of the Americans with Disabilities Act (ADA) in 1990, employers have had to make sure that they do not discriminate against job candidates or employees on the basis of disabilities the individuals may have. This article explores how employers can make their workplaces accessible to persons with disabilities. Areas of discussion include background on the issue; the benefits for employers who hire persons with disabilities; how HR can foster the hiring, accommodation and retention of employees who have disabilities; and the costs of making workplaces accessible for such employees. The article also supplies links to information and resources for developing an accessible workplace. For detailed information on the legal aspects of hiring disabled workers and of reasonable accommodation, see Employing Persons with Disabilities.
Background
Individuals with disabilities have often been segregated and isolated. Passage of the ADA, which prohibits employment discrimination against qualified individuals with disabilities, has advanced understanding of the nature of various disabilities and of the fact that people with disabilities can achieve significant personal and professional goals. Nonetheless, preventing discrimination against such individuals in the workplace continues to be a challenge.
Although physical accessibility within the workplace has improved to some degree for employees with disabilities, job prospects remain difficult. A U.S. Bureau of Labor Statistics (BLS) report in September 2011 showed that the unemployment rate for people with no disabilities was 8.5 percent, while the rate for people with disabilities was 16.1 percent. See, Employment Status of the Civilian Population by Sex, Age, and Disability Status, Not Seasonally Adjusted and Employers' Practical Guide to Reasonable Accommodation Under the Americans with Disabilities Act (ADA).
Business Case
Organizations have many sound business reasons for hiring people with disabilities and for ensuring that the workplace is accessible to them. Not the least of the reasons is the beneficial impact on organizational performance that can result from the skills of a diverse workforce. By fostering a culture of diversity—a capacity to appreciate and value individual differences—employers benefit from varied perspectives on how to successfully deal with business challenges. Although diversity customarily refers to differences in age, sex, ethnic background and, in some instances, religious affiliation, diversity actually encompasses a broader range of individuals' particular attributes and experiences—among them, disabilities. Thus, disability is a component of diversity, and businesses can benefit by taking steps to make certain that people with disabilities are represented in the workforce.
Companies that are lauded for their efforts in attracting and hiring persons with disabilities typically began with a clear vision of what they wanted to achieve, and they believed that people with even cognitive disabilities could contribute to organizational success. Among the success stories of such employers are Walgreens and Cincinnati Children’s Hospital.
HR’s Role
Since HR is responsible for ensuring that the talents and skills of all employees are leveraged, HR professionals can and should hold leaders accountable for employing people with disabilities. HR should determine how their organizations’ leaders and managers view people with disabilities. If barriers in the workplace prevent any employee from succeeding, HR has a responsibility to address those issues.
With regard to persons with disabilities, HR professionals need to be familiar with the many resources that can help them reach out to that segment of the labor force. HR should be knowledgeable about the requirements for—and the methods of achieving—accessibility in the workplace for people with disabilities and should be familiar with methods of recruiting, interviewing and retaining such employees.
Accessibility for Candidates
An organization that envisions employing people with disabilities should make sure the concept of accessibility underlies its candidate-selection process. "In general, the ADA does not require employers to make accommodations unless requested to do so by an individual with a disability," the U.S. Department of Labor (DOL) notes in online guidance, but "individuals with disabilities must be able to participate in all aspects of the application process."1 The DOL offers a checklist for employers who wish to evaluate the accessibility of their facilities for candidates who have disabilities. Among the considerations are the following: Are parking spaces close to the work site entrance? Are there steps or abrupt level changes on the pathway from the parking area to the building’s entrance? Are access ramps appropriately graded, and do they have handrails? Are doors at least 36 inches wide for wheelchair access, and are the doors easy to open? Is the human resource office or the place where the application process is administered accessible? Would a person with disabilities have access to a restroom, a water fountain and a public telephone? Are elevator control panels lower than 54 inches from the floor and fitted with raised symbols or numbers?
See, Opening Doors to All Candidates: Tips for Ensuring Access for Applicants with Disabilities.
Recruiting Strategies
When filling a job opening, staffing managers should expand their outreach efforts to include qualified candidates who have disabilities and who thus could enlarge the talent pool.
One source of such candidates is the federal Workforce Recruitment Program, which connects federal and private-sector employers with highly motivated postsecondary students and recent graduates who have disabilities. In addition, the DOL’s Office of Disability Employment Policy offers a number of resources for employers seeking candidates.
Other methods of recruiting workers with disabilities include the following: Using disability inclusion statements in job advertisements and in the career section of the organization’s Internet site. Posting job openings on disability-oriented job boards. Ensuring that applications are in formats accessible to all people with disabilities. Providing reasonable accommodations that qualified applicants would need in competing for the job. Attending disability-focused job fairs. Educating all employees, especially managers, about working with employees with disabilities.
Another key recruiting step is to ensure that the company’s human resource systems are accessible to people with various types of disabilities. Many companies have moved toward use of the Internet as their sole means of recruiting, posting job openings, and collecting resumes and applications. For help in making their websites accessible to people with disabilities, employers can tap the resources of EARN, a free consulting service that is part of the National Employer Technical Assistance, Policy, and Research Center at Cornell University. EARN is funded by the DOL’s Office of Disability Employment Policy. EARN supports employers in recruiting, hiring, retaining and advancing qualified individuals with disabilities. It does so through confidential consultation and technical assistance, customized training, online resources, and links to state and local community-based organizations serving job seekers with disabilities.
Interviewing Strategies
When considering a job candidate with a disability, an interviewer may first want to question the applicant about his or her ability to do the job. But that should not be the first question the interviewer asks, experts say. Initial queries should relate to the candidate’s skills and experiences. Although the ADA restricts employers from asking specific questions about a candidate’s disability, employers may ask the candidate what workplace accommodations he or she would need in order to do the job effectively. Usually, the candidate will volunteer such information early in the interview to resolve any concerns. See, Americans with Disabilities Act.
When interviewing a candidate with a disability, staffing professionals should keep the following in mind: The focus should be on the merits of the candidate, and hiring managers should be willing to adapt the application or interview process to the candidate’s strengths. For example, an engineer with high-level autism may not be able to speak well, so a situational interview may not be appropriate. But the candidate may have an outstanding portfolio. In that person’s particular field of engineering, his or her accomplishments and experience may be more important than evaluating his or her ability to talk about them. Never assume that people with disabilities lack the necessary education, training, and experience for employment or that they would not be able to perform essential job functions. Workers with disabilities might do things differently, which in fact could mean they fulfill their responsibilities more efficiently and effectively than previous employees in the position.
Accommodating for Accessibility
Employers who have never hired persons with disabilities may overestimate the cost and complexity of making the workplace accessible for such employees, but accommodation need not involve significant extra expense. Often, the employee requires nothing more than considerations like those already provided to others in the organization, such as flexible work schedules, telecommuting or restructured workstations. Although sophisticated adaptive equipment can cost more than $10,000, most accommodations cost no more than a few hundred dollars — a small expense considering the potential return on the investment.
Recent research from the Job Accommodation Network (JAN) found that 56 percent of employers who submitted information about the costs of accommodating employees with disabilities said there were no costs, and 38 percent said they bore a one-time cost, typically about $500 — or about $343 more than they would have spent on accommodating an employee without a disability. (The remaining 6 percent said they had annual costs but supplied little data about those costs.) JAN, a service of the DOL’s Office of Disability Employment Policy, provides free consulting to help employers determine possible accommodations based on disability. See, Workplace Accommodations: Low Cost, High Impact.
In 2010 the U.S. Department of Justice issued final rules under the ADA’s Titles II and III, adopting revised standards for new construction, alterations and — where required for public accommodations — barrier removal. The standards provide specifications for a wide range of architectural features, including public stairwells, elevators, restrooms, parking spaces, signage and assembly areas. They also require accessible common-use circulation paths within employee work areas. In new construction and alterations, employee work areas must be designed and constructed so that individuals with disabilities can approach, enter and exit the areas. See, Revised ADA Regulations Implementing Title II and Title III.
HR can help managers understand that accommodations are tools to help ensure that a person with a disability can be productive, just as tools are provided to those without disabilities to ensure their productivity. The tools may be different — perhaps a larger computer monitor or a laptop for working at home for the employee with a visual disability, while an employee with no disability might need a glare screen for a desktop — but their purposes are essentially the same. Successful organizations invest in all employees and do not limit themselves in finding creative solutions to move the organization forward.
Help with the costs of accommodating and training employees with disabilities can be obtained from various state agencies. For example, if a company changes its computer systems and an employee who is blind needs to have his or her adaptive technology upgraded accordingly, vocational rehabilitation services may help. See, Vocational Rehabilitation Agencies.
Employers who hire people with disabilities may also be eligible for various federal tax incentives, including the Disabled Access Credit for small businesses, the Architectural and Transportation Barrier Removal deduction, and the Work Opportunity Tax Credit Program, which are described on the JAN website. See, Job Accommodation Network and Tax Benefits for Businesses Who Have Employees with Disabilities (IRS).
Finally, bear in mind two possible additional benefits in making accommodations for employees with disabilities. First, accommodations can have cascading effects that help other employees. Voice recognition software, for example, is being adopted widely within workforces because it can be more efficient than traditional keyboarding. Second, an organization that embraces workplace accommodations for new hires with disabilities may be able to make similar workplace accessibility adjustments for employees who later become disabled. Accommodating such employees and thereby keeping them in their jobs can enable employers to side-step the probably far greater expenses of hiring and training replacements for those workers.
Performance Standards
Some employers assume that employees with disabilities cannot be held to the same levels of performance that are applied to employees without disabilities. That assumption is incorrect. According to guidance issued by the U.S. Equal Employment Opportunity Commission (EEOC), "An employee with a disability must meet the same production standards, whether quantitative or qualitative, as an employee without a disability in the same job. Lowering or changing a production standard because an employee cannot meet it due to a disability is not considered a reasonable accommodation. An employer should evaluate the job performance of an employee with a disability the same way it evaluates any other employee’s performance."2
When hiring or evaluating employees, HR can use the EEOC’s guidance to educate managers that expected levels of performance will be the same for employees with disabilities as for all others and to stress that loyalty, dependability and a desire to do a good job are attributes that are not exclusive to employees without disabilities. Moreover, studies regularly demonstrate that the safety records of disabled employees are equal to or better than those of other workers.
Managers unfamiliar with the finer points of ADA regulations may worry that they cannot fire or fail to promote an underperforming employee who is disabled, fearing a discrimination suit. However, the reality is that the process for terminating an employee with a disability is the same as that for terminating any other employee.
Retention Strategies
Treat employees with disabilities as any other employee relative to retention. Employers should enable the employee to do his or her best by providing access to tools, resources, information, equipment and career-development opportunities. Following are some of the more effective retention practices: Research shows that presenting applicants with a realistic job preview during the recruitment process has a positive effect on retention of those new hires. See, Staffing Issues Critical to Business Strategies and Recruiting for Retention. The use of biographical data in the selection process can identify life experiences that tend to differentiate those who are more likely to stay with an organization from those who are more likely to quit. Life experience associated with people who stay may include significant tenure in previous jobs, educational experience, involvement and leadership in career-related clubs and organizations, and early work experiences. Assessing a candidate’s "fit" with the job and the organization can also be helpful.
See: Fueling the Talent Engine — Finding and Keeping High Performers How Google Searches for Success Use Employment Branding to Hire, Keep Employees With Best Cultural Fit Socialization practices — delivered via strategic onboarding and assimilation programs — can help new hires become embedded in the company and thus make them more likely to stay. Such practices include shared and individualized learning experiences, formal and informal activities that help people get to know one another, and the assignment of more-seasoned employees as role models for new hires. See, Managing the Employee Onboarding and Assimilation Process and Fusing Fun With Work Aids Retention. If employees lack opportunities to continually update their skills, they are more inclined to leave. However, training and development can be a double-edged sword because it can make employees more marketable, increasing the ease with which they can be recruited by rival organizations. Agencies and organizations Office of Disability Employment Policy Job Accommodation Network
Information tools ADA/ADAAA Policy SOAR (Searchable Online Accommodation Resource) JAN on Demand Employers' Practical Guide to Reasonable Accommodation under the Americans with Disabilities Act (ADA) Accommodation Information by Disability: A to Z Information by Product or Service ADA Library How to Determine Whether a Person Has a Disability under the Americans with Disabilities Act Amendments Act (ADAAA) Disability Employment Resource Page
Endnotes
1 U.S. Department of Labor, Office of Disability Employment Policy. (2011). Opening doors to all candidates: Tips for ensuring access for applicants with disabilities. Retrieved from www.dol.gov/odep/pubs/fact/opening.htm.
2 Society for Human Resource Management. (2011). Disability: Hiring employees with disabilities: Are there myths about hiring people with disabilities that impede disability recruiting initiatives? If so, what can HR do about it? Retrieved from www.shrm.org/TemplatesTools/hrqa/Pages/HiringEmployeeswithDisabilities.aspx
Acknowledgement—This toolkit was prepared for SHRM Online by Margaret Fiester, SPHR, operations manager of the SHRM HR Knowledge Center. In addition to relying on her own professional expertise and research, the author has incorporated existing SHRM Online content in developing this treatment.
Publication Note—This toolkit was first published in December 2011. SHRM staff members will update it periodically as developments in the diversity discipline warrant. For the most recent developments, see the Diversity discipline page and articles archived under specific diversity topics. Notify SHRM of broken links or concerns about the content by e-mailing content@shrm.org
All information in this article was obtained directly from the SHRM Volunteer Leader Resource Center (VLRC).
The New Noncompete World: Marsh USA Inc. v. Cook[1]
By Andrea M. Johnson[2]
On December 16, 2011, the Texas Supreme Court issued an "earth-shattering" noncompetition decision in Marsh USA Inc. v. Cook.[3] The Cook case has taken Texas noncompetition law to a place it has never been, although from the reasoning of the Texas high court suggests that this is where the law should have always been. It is as if we were Dorothy in "The Wizard of Oz," and had not realized that we were always "home" from day one.
The basic ruling in Cook may not sound, on its face, as any big deal. Cook holds, generally speaking, that an employee’s agreement to a stock option agreement may be sufficient consideration for the enforcement of a noncompetition agreement.[4] While the decision seems simple, in some respects, it is also quite unique from past noncompetition law and sets the stage for much broader interpretations of these agreements, as well as much more certainty in their enforcement.
To understand the considerable shock waves that Cook has produced, we have to consider that our Texas courts have long had deep antipathy toward noncompetes and the law was rather confused for decades, leading attorneys, at times, to question the usefulness of the covenants all. For example, in 1987, the court issued Hill v. Mobile Auto Trim,[5] which held noncompetes unenforceable if they prohibited employees from their "common calling." This kind of argument is one often still alluded to by non-lawyers when talking about noncompetes, though it has long been superseded. After Hill, and on the basis of Texas Business and Commerce Code Section 15.50, which was enacted in 1989 in response to Hill, the Texas Supreme Court issued the Light v. Centel Cellular Co.[6] decision. Section 15.50 put in place a concrete rule for analyzing noncompetition clauses, which Light in 1994 analyzed. Light determined that a two-part test would be followed to determine if the noncompetition agreement was "ancillary to or part of" an otherwise enforceable agreement, a requirement of Section 15.50. The test mandated that (A) the "consideration" for the enforceable agreement "must give rise to the employer’s interest" in the competitive restraint, and that (B) the promise not to compete must be designed to enforce the employee’s consideration or return promise to the employer.[7]
Since Light, the Texas courts had closely scrutinized these agreements and largely relegated their enforcement to situations where there were clear nondisclosure provisions with corresponding and well-articulated promises by the employer to disclose confidences to the employee. The issues of "ancillary"-ness and "proper" consideration seem to take on heightened review with high standards for enforcement, and there was not unanimity in the courts. For example, in many decisions, noncompetes were deemed to be directly related to these particular promises of confidentiality only, essentially exclusively (thus, other promises of cash or other compensation did not seem to support a noncompete). Moreover, the failure to include an obvious employer promise to supply the employee proprietary data or the employer’s failure to provide confidential data virtually at the moment the agreement is signed could, in some cases, lead to the voiding of the noncompetition agreement.[8] And, all of that close scrutiny came well before a court might even get to the issue of whether the agreement was reasonable as to time, place, and subject matter. Thus, in cases following Light, the "reasonableness" issue seemed to play second fiddle to the issue of whether the agreement was at all a contract and possibly enforceable.
All of this hyper-technical scrutiny began to change in 2006. In that year, the court announced in Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson[9] that a promise to provide confidential data could still be enforceable even if the consideration (the confidences) were provided months after the agreement not to compete was signed. The court signaled a switch in analysis specifically holding that it did not want to focus on "overly technical disputes," but instead on whether the agreement was reasonable or not.[10] Then three years later, in Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,[11] the court took the analysis a step further by concluding that an employer’s explicit promise of providing confidential data is not necessary, as long it could be reasonably implied from the agreement.
Cook goes even further because the agreement there was based on the provision of the stock options, not the provision of confidential data, in return for the noncompete. The Cook court overwrote, essentially, a number of past decisions, including Light, finding that they had gotten the law wrong by injecting the "give rise to" standard into the interpretation of Section 15.50, which nowhere uses that language. Justice Wainwright, who wrote the majority opinion, noted that all the statute required was "a nexus – that the noncompete be ‘ancillary to’ or ‘part of’ the otherwise enforceable agreement between the parties."[12] The court, thus, rejected "more stringent requirements on top of those in the Act," finding that the Act’s language sufficiently prevents "naked restraints on trade and would thwart the Legislature’s attempt to enforce reasonable covenants."[13] And with that one thought, the court eliminated at least two decades of angst in the Texas noncompete law.
The enforcement of the particular clause in Cook is not a certainty, as the court returned the case to the trial court for a review of the reasonableness standards of "time, scope of activity, and geographical area."[14] Nevertheless, the holding is monumental given past history.
How far will Cook take us in the next generation of noncompete cases? Time will tell, as they say. It may be important to consider that Mr. Cook was Marsh’s "managing director," so obviously a very key player at the company with key contacts and clients, facts highlighted by the court.[15] Thus, the issue of protecting company goodwill through Mr. Cook’s cooperation and noncompetion are not hard to envision, even given past law. Query, however, would this kind of agreement bar noncompetition of much lower level managers and supervisors or even hourly employees? What other kinds of consideration will the court accept for the enforcement of this restraint of trade? Will cash, bonuses, or the corner office suffice? The court also focused on the concept of "freedom to contract" as reason for enforcement of the agreement against Mr. Cook – and, given his position and what he was offered and accepted by the company, that "freedom" is not hard to justify.[16] But what about the lowly first-line supervisor or others in an organization who may feel that turning their back on offered compensation (stock, etc.) may be viewed as not showing the expected support for the company, perhaps raising loyalty or other questions? In other words, how voluntary is "voluntary" in the at will employment world where some feel that employers may have the upper hand, particularly given this economy? Ultimately, how far do we as a society want to encourage and permit restricting persons who want to seek work elsewhere? What is reasonable?
The next cases down the line will tell us the answers. For now, employers can generally breathe some relief that noncompetes will be easier to enforce, as long as they meet the basic reasonableness standards. We do know also, as Dorothy did, that Section 15.50 has always been our home, whether we understood that or not. [1] 2001 Tex. Lexis 930 (Tex. Dec. 16, 2011). [1] Ms. Johnson is the partner-in-charge of employment law (management representation) at Burleson LLP. [1] Id. [1] The clause was actually a nonsolicitation agreement but the same standards apply. Id. at *5-8 ("Covenants that place limits on former employees’ professional mobility or restrict their solicitation of the former employers’ customers and employees are restraints on trade and are governed by the Act." Id. at *6). [1] 725 S.W.2d 168 (Tex. 1987). [1] 883 S.W.2d 642 (Tex. 1994). [1] Id. at 647 (emphasis added). [1] See, e.g., TMC Worldwide, L.P. v. Gray, 178 S.W.3D 29, 37-38 (Tex.App.-Houston [1st Dist.] 2005, no pet.) (confidential data given a year later; unenforceable); Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452 (Tex.App.-Houston [1st Dist.] 2005, no pet.) (data given later the same day as agreement signed; held unenforceable). [1] 209 S.W.3d 644 (Tex. 2006). [1] Id. at 655. [1] 289 S.W.3d 844 (Tex. 2009). [1] 2011 Tex. LEXIS 930, *27. [1] Id. at *30. [1] Id. at *36. [1] Id. at *32-34. [1] Id. at *7-8 ("The Texas Constitution protects the freedom to contract. . . Entering a noncompete is a matter of consent; it is voluntary.").
The average rate for all employers is set at 1.96 percent for 2012, down from 2.03 percent in 2011, while the average rate for experience-rated employers is 1.87 percent, down from 1.96 percent. The maximum UI tax rate, paid by 6.2 percent of Texas employers, is 7.58 percent, down from 8.25 percent in 2011.
In setting 2012 tax rates, TWC said that it "sought to minimize the effects of any increases and exercise all the authority given to it by state law to hold the tax rates to the lowest and most predictable rates possible." To keep taxes low, TWC suspended the deficit tax in 2011, a strategy supported by employer groups across the state. TWC has also recently increased work-search verifications and improved data sharing between agencies to prevent fraud and control costs. Texas’s minimum tax rate remains lower than that of other states, TWC said.
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Benefits of choosing a College/University Program: Receive expert certification preparation from certified instructors. Choose from over 280 convenient locations worldwide. Prepare in a traditional classroom setting, online or a hybrid of the two. Receive tuition reimbursement. Learn and network with your peers.
Click here for more details about locations in Texas.
Be sure to use the Promo Code CHSWD to save $15 off the $180 first-time/new member rate.
Having difficulty "selling" membership to your boss? Consider this:
• The annual membership costs less than about one hour of an attorney’s or consultant’s time.
• You get professional development and quick answers to your questions without leaving the office.
• If you want to ensure that your company continues to pay your membership fee, whenever you get an answer, an article, or a resource from the SHRM website, be sure to tell your boss where you got it.
• Show him or her the value your company is getting from SHRM.
