Bar News - April 15, 2015
Labor & Employment Law: Minimizing Risks Associated with Employee Mobility
By: Mark M. Whitney
As any employment lawyer knows, employees are constantly moving in and out of jobs. Our clients hire and fire employees. Employees quit to pursue better opportunities. Employees of all levels move between competitors. Sometimes, employment lawyers are involved in these moves, but more often they are not.
All of these common occurrences present significant risks to the former employer, the employee, and in some cases, the new employer.
Ideally, preparation for the on-boarding or departure of key employees begins long before they move. As lawyers advising the employers or employees in these situations, there are many best practices we can and should encourage to avoid common mistakes, minimize risk, and prevent unnecessary litigation. Here are some – but certainly not all – examples of best practices to consider.
Conduct Exit Interviews ... Really!
Too often employee departures (particularly those of executives and senior employees), whether resignations or terminations, are managed casually and informally. An exit interview is a useful tool to ensure that the items discussed below, as well as other termination logistics, are covered with the outgoing employee.
When he or she speaks with a departing employee, the employer opens an important line of communication to tie up any loose ends and fend off potential problems down the line. During the interview, the employer should confirm and document that the employee has returned all company property; that he or she has not taken, copied or transmitted any intellectual property or sensitive company information; and that he or she is aware of any continuing obligations not to use or appropriate the employer’s business information.
The use of electronic devices is very often overlooked by both the employer and employee in mobility situations. The exiting employee should ensure that she does not retain any confidential data belonging to her employer and should refrain from acting in a way that leaves her open to being accused of doing so (e.g., downloading 50 gigabytes of family photos from a work laptop on the last day of work looks suspicious to a former employer and their forensic computer consultant).
Employees should consider all devices that they may have used during employment, including thumb drives, smartphones/PDAs, portable hard drives, personal computers, etc. I often advise outgoing executives to – literally – shake their bags and briefcases upside-down to ensure that they locate all data storage devices.
A best practice for the outgoing employee is to present all devices that she used for work to company IT or HR staff during the exit process and work together with them to ensure that the company is comfortable that it recovered or deleted all company data from the employee. If the outgoing employee uses this collaborative process to remove personal information from company devices, it provides that employee important cover from any subsequent accusations of improper downloading of data.
Employers need to focus on the employee’s data use practices to ascertain whether it obtains the return of company data during the exit process. Far too often, this step is completely ignored by employers. Did they use a laptop? Other devices? Did the employee use a home computer to access the employer’s IT system? Did employees use webmail services (e.g., Gmail or Hotmail) in the performance of their job duties?
The employer needs to be concerned about return of the employee’s cell or smartphone and the return or destruction of any important company data on that device (e.g., if the company has a bring-your-own-device policy).
What about the outgoing employee’s cell phone number? This too is an item that is frequently ignored in the exit process. Employers who may be concerned about post-employment solicitation of customers and employees should take steps to ensure that the employee’s cell phone number is owned by and stays with the company.
In the past few years, I can think of at least three different cases I have handled in which the recently departed employee is accused of accessing his former employer’s IT system after termination. An outgoing employee’s IT system access must be locked down in connection with a departure.
For difficult terminations, it often makes sense to lock down system access during the termination meeting. While these steps may seem obvious, a startling percentage of employers forget them.
Employee use of social media in connection with performing job duties is still largely unchecked by employers, yet it remains one of the more fertile grounds for disputes.
Did any employees use LinkedIn to foster development of key business contacts? Did any employees maintain their customer lists on social media? Did employees create any Twitter or other accounts for client and prospect communication? When the employee leaves the company, are they required to take any action with regard to these accounts? Who owns the account or information contained in it?
These and other questions are being examined by courts around the country, and the case law in this area is still in the initial stage of development. Not surprisingly, the few cases that have been decided appear to suggest that employers should communicate their expectations about social media usage for work purposes to employees through policies and contracts.
Outgoing employees often “clean up” their email in advance of their termination date. While this activity is sometimes conducted in good faith, it is also used as an opportunity to cover one’s tracks on the way out. Very savvy employees delete email sufficiently in advance of a full server back-up cycle (e.g., more than 30 days), and ensure that their email purging becomes permanent.
Employers should consider using robust property return provisions in employment agreements, as well as policies. When writing these clauses, be specific and instruct employees to refrain from any email purging or “clean up” in connection with a departure. Reiterate to employees that emails sent and received by the employee belong to the company, and are company property.
Employers may also wish to consider pulling and setting aside back-up tapes from their store of tapes when they learn about the impending departure of a key employee. This is a very low-cost way to ensure the preservation of the employee’s email folder on the company server.
Handle Contracts Effectively
Employee mobility situations present employers with the opportunity to use contracts to protect important business interests.
While the subject of which employment-related contracts are appropriate under different circumstances is worthy of a series of comprehensive articles, it is worth remembering: present proposed restrictive covenants with or before the offer letter and reaffirm those covenants in writing upon promotions or significant changes in duties (see RSA 275:70).
Additionally, employers should provide exiting employees with copies of any agreements they signed. In my experience, employees often forget they signed restrictive covenants years earlier. Providing a copy at an exit interview can prevent legal disputes before they occur. Consider an explanatory letter to accompany such agreements, to outline the post-employment obligations of the outgoing employee in plain language. The key here is communication, so that both the employer and employee are clear on the employee’s ongoing obligations.
These are common sources of disputes between employers and employees in employment mobility situations. Counsel who represent employees or employers in these matters would be wise to consider them to make the mobility process more effective and trouble-free.
|Mark M. Whitney
Mark M. Whitney is a partner at Morgan, Brown & Joy. He leads MB&J’s non-compete, trade secret, and unfair competition practice and authors a blog covering these issues at www.nenoncompetes.com.