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The Holidays are a Time for Giving (new policies, that is!)

It's that time of year again! With the holidays just around the corner, businesses are hoping to close 2014 on a positive note and are in the midst of budgeting for 2015. This makes the holiday season a smart time for discarding old, outdated policies, and creating new, updated ones. 

The challenge of implementing wholesale changes in corporate policies can be daunting, but even minor policy revisions can have an impact on employment liability exposure. Therefore, if your company has not already done so, we recommend considering the following:

Update Restrictive Covenant Agreements: Effectively protecting your company from unfair competition is imperative for most businesses and is often accomplished by requiring key employees to sign agreements including confidentiality, non-competition, and non-solicitation provisions. This is particularly important in Georgia, which enacted the Georgia Restrictive Covenants Act in November 2010. Under that law, restrictive covenants entered into on or after May 11, 2011 are generally subject to presumptions which are much more favorable to employers than the presumptions applied to covenants signed prior to that date. Surprisingly, many companies still have not taken advantage of the new law, as reflected in the recent decision of Vulcan Steel Structures, Inc. et al. v. McCarty et al., in which the Georgia Court of Appeals invalidated a pre-Act restrictive covenant that likely would have been found enforceable (or at least subject to reasonable modification) under the new law.

Update Arbitration Agreements to Include Class Waivers: As discussed in two previous elerts (Appeals Court Holds that NRLA Does Not Prevent Waivers of Class Action and Protecting Yourself from Potential “Joint Employer” Liability), federal courts have generally upheld arbitration clauses that require employees to proceed individually, rather than as part of a class or collective action. Thus, while the National Labor Relations Board (NLRB) continues to take the position that these types of waivers are invalid, despite federal court decisions to the contrary, we recommend that clients with arbitration agreements in place consider including class action waiver clauses. 

Revise Handbook Policies to Withstand NLRB Scrutiny: Finally, as reflected in an elert from earlier this year (Seven Company Handbook Items Drawing Scrutiny), the NLRB has continued to focus on employers' handbooks for policy provisions that employees could interpret in ways that violate the National Labor Relations Act.

These include, but are not limited to:

  • “Non-union employer” statements contained in handbooks
  • Policies requiring employees to direct media and law enforcement inquiries to specific company officials
  • Employee conduct policies that could be interpreted to prohibit concerted activity protected under the NLRA, such as certain types of social media activity

Any one of the foregoing policy changes could have a significant impact on your company's legal exposure. Most importantly, implementing these changes can be done swiftly and inexpensively.

If you would like assistance updating your business's policies, please respond to this email or contact your Elarbee Thompson attorney for more information. 

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