Trade secret misappropriationYou may have heard something in the news about a former employee getting caught holding onto his prior employer’s documents after losing his job. This example is unusual, to say the least. And setting aside your political leanings, let’s look at how similar scenarios play out for the rest of us.

The Lawsuit against former employees.

Specifically, on September 7, 2022, Plaintiffs Dearborn Mid-West Company and Dearborn Holding Company, LLC, sued three former employees for violations of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § §§ 1836 et seq., the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq., the Michigan Uniform Trade Secrets Act, Mich. Comp. Laws § 445.19021 et seq., as well as breach of contract, common law unfair competition, statutory and common law conversion, and civil conspiracy.

Similar to a certain ex-employee living at Mar-a-Lago Florida, the three former employees decided to hold onto copies of business records after their employment ended.

Specifically, Plaintiffs conducted a computer forensic audit of three former employees’ old computers, which confirmed they had collectively “copied. . . thousands of files containing” confidential and trade secret information by transferring them to external drives and forwarding emails to their personal accounts before leaving their previous positions. For some, this might be described as political theater or a Witchhunt. But for Plaintiffs, they described these actions as a:

… brazen theft and unauthorized use of [Plaintiffs’] trade secrets, proprietary standards, and other confidential competitive information—information that [Plaintiff] created over … 75 years, and through the expenditure of millions of dollars. Defendants’ theft was no accident, and instead the result of a months-long, carefully calculated plan: indeed, the individual Defendants systematically stole tens of thousands of files filled with [Plaintiffs’] confidential, proprietary, and trade secret information before they resigned their employment … and went to work for its competitor.

Before the defendant former employees responded to the lawsuit, the Plaintiffs moved for a temporary restraining order and preliminary injunction, but it was denied. Having litigated these sorts of claims, including seeking the same kind of relief, the denial has very little to do with the underlying merits or likely strength of the case; Temporary restraining orders (TRO) – especially TROs that are sought without the opposing party having an opportunity to respond – require a high-burden to be met. And one or two facts can tip the scale in meeting that burden.

Departing Employees and Protecting Confidential Information.

While the Court denied the requested TRO, it also noted that “Plaintiffs lay out what appears to be a strong case for their underlying claims.” And those claims provide for statutory attorney fees and the means to potentially recoup millions of dollars from the defendants. This might not be a big deal if you are an ex-President, a billionaire, you can convince enough people (i.e., five jurors) that the claims are just a witch-hunt, the case gets assigned to a judge you appointed to the bench or any combination of the preceding. But if none of those factors apply, then you probably should be concerned. And here are two points to consider:

  1. First, there are almost always digital fingerprints left behind if an employee decides to walk out the door with copies of the employer’s business information. So it is vitally important for employers to have plans and procedures in place to preserve and discover such evidence.
  2. Second, for individuals starting a new job or company, there will almost always be digital fingerprints you leave behind if you decide to walk out the door with company information. And even if you are like most departing employees who do not misappropriate business information, it may not matter if you signed a non-compete agreement or other post-employment restriction. So unless you happen to be a former President and billionaire, it is important to know and understand what obligations you may have when your employment ends.

If you have such obligations, then it is important to consult with an experienced non-compete attorney to discuss options for complying with your post-employment restrictions or challenging them if necessary.

Contact Michigan attorney Jason Shinn if you have questions about this article, conducting workplace investigations, or noncompete restrictions. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

LGBT Employment Discrimination

The Michigan Supreme Court ruled yesterday in a 5-2 decision that Michigan’s main civil rights statute, the Elliott-Larsen Civil Rights Act, prohibits discrimination based on sexual orientation. This means ELCRA’s anti-discrimination protections extend to LGBT (lesbian, gay, bisexual, and transgender) Michiganders.

Going Deeper:

The Michigan Supreme Court decision stems from a lawsuit, Rouch World LLC v Dept. of Civil Rights, filed by two for-profit companies that refused to provide services to LGBT customers. One company, Rouch World, rented property for events and refused to allow a lesbian couple to hold their wedding onsite. The other company, Uprooted Electrolysis, refused to provide services to a transgender woman.

In October 2021, a Court of Claims judge sided with these businesses finding that Michigan’s ELCRA did not include protections for sexual orientation because the term “sex” in the act’s language is so broad.

In rejecting that decision, the Michigan Supreme Court held, “Discrimination on the basis of sexual orientation necessarily constitutes discrimination because of sex.”

The Michigan Supreme Court relied heavily on the U.S. Supreme Court’s 2020 ruling in a landmark case, Bostock v. Clayton County, Georgia. That case concerned whether the federal Civil Rights Act of 1964 protected people from discrimination based on their sexual orientation and gender identity. The Bostock case also involved a companion case involving a Metro Detroit transgender woman who successfully challenged her firing from a local funeral home for coming out as transgender.

The Bostock opinion held when an employer fires an employee “for being homosexual or transgender,” that employer “fires that person for traits or actions it would not have questioned in members of a different sex.” Thus, the Court concluded, “[s]ex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” And this was the same conclusion reached by the Michigan Supreme Court.

And this decision is long overdue. For example, in 2013 I wrote about the need for Michigan law to extend its civil protections under ELCRA to sexual orientation and gender identity. See Sexual Orientation Discrimination and Michigan Law – Is it a Time for a Change? Nine years later, here we are.

What This Means for Employers and Employees.

In 2015 after the U.S. Supreme Court’s ruling in the Obergefell v. Hodges same-sex marriage case, we cautioned employers that Michigan’s ELCRA recognizes marital status as a protected classification – such protections did not exist under Federal law. Thus, Michigan LGBT employees in same-sex marriages had some but not all protections against discrimination under Michigan’s ELCRA.

But now under the ELCRA, sexual orientation is among protected characteristics like race, religion, weight, and marital status. In short, Michigan employers and landlords cannot fire, deny jobs, access to housing, or take other adverse employment action against an LGBT person simply because of who they are.

Further, while Bostock held federal law covered sexual orientation, the Michigan Supreme Court’s decision that Michigan law covers sexual orientation is much more expansive than the Bostock decision reaching the same conclusion about federal law. This is because Michigan’s ELCRA applies to all employers and Title VII applies only to employers with at least 15 employees.

The two dissenting judges raised issues prospective litigants will likely face or used to limit protections for LGBT individuals.

But for now, the best advice I can give Michigan employers is to exercise the same caution and reasoning that should be applied before making any adverse employment decision. This generally means making sure the disciplinary decision stems from a workplace policy violation or poor job performance for which other similar but non-LGBT employees would have been disciplined.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

On June 9, 2022, Tyson Foods and its subsidiary, The Hillshire Brands Company, were sued over alleged employment discrimination. The lawsuit is by a former employee, Redina Hayslett, who claims she was terminated after refusing the COVID-19 vaccine on religious grounds.

Why it Matters:

We previously predicted companies should prepare for a litigation trend over religious discrimination claims involving Covid-19 vaccine requirements. See The Next (Litigation) Pandemic – Religious Discrimination Claims. This recent suit against Tyson Foods bolsters our conclusion.

It also highlights an added wrinkle for employers: Tennessee elected to pass legislation punishing employers who enforced certain workplace policies involving Covid-19 vaccine requirements. Other states have taken similar steps to interject governmental oversight of private sector HR; Michigan thankfully is not one of those states.

But for companies with operations where state legislators are now looking over their employment policies like Tennessee, avoiding employee Covid-19-related lawsuits is going to be an expensive challenge.

Going Deeper:

In August 2021, Tyson Foods and its subsidiary, The Hillshire Brands Company, made it a condition of continuing employment that all U.S. based Tyson employees would have to be vaccinated against COVID-19. Tyson also required employees to provide proof of vaccination, unless an employee had a documented and approved reasonable accommodations for a disability or sincerely held religious beliefs, practices, or observances.

Plaintiff submitted a religious accommodation request stating that her belief in the power of prayer, faith in Christ, religious freedom, and First Amendment rights prohibit her from receiving a vaccination for COVID-19.

Tyson responded to Plaintiff’s request for religious accommodation with a determination that the only accommodation Defendants could give Plaintiff was an unpaid leave of absence from work for a period of up to one year. Plaintiff eventually responded by suing Tyson and its subsidiary.

Extending Government Oversight to HR:  

Tennessee passed a law in November 2021 prohibiting private businesses and other entities from compelling or otherwise taking “adverse action” against a person relative to providing proof of having received a COVID-19 vaccination if the person objects to being vaccinated “for any reason.”  Thus, under the Tennessee law, it is illegal for employers like Tyson, to take adverse action against a person based on their vaccination status.

Further, Tennessee politicians removed any qualifying or limiting language for what objections must accept, e.g., objections for religious or medical reasons. This means employees with any sort of objection, whether unfounded or frivolous are insulated from discipline. And this sort of broad prohibition in Tennessee and other like-minded states will no doubt fuel employee vaccine-related lawsuits against employers.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals about the issues discussed above and other employment matters under federal and Michigan employment laws. In 2020, Mr. Shinn work was consumed with Covid-19 legal issues, including helping clients understand their rights, vaccine and shut-down orders, and litigating coronavirus issues.

Magic Mushrooms and workplace discriminationLast week Amazon was sued over alleged employment law violations. The lawsuit asserts the plaintiff was unlawfully terminated after reporting a co-worker for using mushrooms that naturally contained an active but illegal psychoactive chemical called psilocybin.

Why it Matters:

Psilocybin and similar psychedelic compounds are considered Schedule I substances. This means they are illegal under federal law and under many state laws, including Michigan. Like medical marijuana usage, with decriminalizing and more research showing psychedelics as a viable therapeutic alternative in treating depression, substance use disorders, and other mental illnesses, employers should expect to see more workplace issues like those involved in the lawsuit against Amazon.

Background:

Turning back to the lawsuit, Larkin v. Amazon.com Services, LLC, Case No. 3:22-cv-00942, the Complaint asserts plaintiff reported to Amazon’s Investigations unit that an employee was using the illegal drug, psilocybin mushrooms. Plaintiff alleged he believed the use of the mushrooms was a felony and a workplace hazard to public health and safety. Amazon allegedly did not discipline the employee reported to have used the psilocybin mushrooms. Instead, Plaintiff alleges he became the subject of an Amazon investigation and was eventually terminated. Plaintiff was told his termination was because he failed to disclose an improper relationship between two other Amazon employees — a violation of Amazon’s employee policy.

These are just the allegations in the complaint. No doubt these claims will be thoroughly litigated and contested.

But coincidentally, the same week Amazon was sued for discrimination over psilocybin mushrooms, an initiative to put on the 2022 ballot a proposal asking Michigan voters to decriminalize certain psychedelic plants and fungi was put on hold.

The “Michigan Decriminalization of Psilocybin Mushrooms and Other Plants and Fungi Initiative,” was approved at the beginning of the year by Michigan’s Board of Canvassers. But with only 180 days to gather enough signatures to put it on the 2022 ballot, the group spearheading the Initiative announced they would instead seek to put the Initiative on the 2024 ballot. Here’s a press release from Myc Williams, the campaign manager for the Initiative:

It’s time to refocus our energy. We knew a June 1st deadline make the 2022 ballot was ambitious with just over two months to collect, and now we know we have the momentum necessary to move forward with a normal 180[-day] collection period. We’ll see ya at the polls in 2024.

Decriminalizing Mushroom and Plant Psychedelics and HR

A wealth of research shows that mushrooms containing psilocybin are generally considered physiologically safe and have shown medical benefits in treating depression, substance use disorders, and other mental illnesses. See, e.g., David E. Nichols, Psychedelics, 68 PHARMACOLOGICAL REVIEWS 264, 266 (2016).

Yet these benefits don’t change the illegal standing psychedelic mushrooms and similar compounds are psilocybin. And going back to the lawsuit against Amazon, employers generally need not accommodate an employee’s use of an illegal drug – even if that drug is used to treat a condition that would otherwise be protected under Michigan or federal anti-discrimination laws. Similarly, terminating an employee for reporting illegal drug use exposes an employer to legal liability. And while Amazon will likely contend its termination of the plaintiff was not for reporting illegal drug use or otherwise not unlawful, it will be making that argument in a federal lawsuit.

The tension between using an illegal substance to treat a condition and workplace accommodation laws became a frequent issue for employers when Michigan and many other states began decriminalizing the use of marijuana for medical or recreational use. And given the promise of psychedelics as viable therapeutic alternatives in treating depression, substance use disorders, and other mental illnesses, companies will need to decide how to handle such use by employees. Despite similar medical benefits of marijuana use, it was only after Michigan law largely decriminalized marijuana use did employers move away from workplace policies that strictly penalized marijuana use. Psychedelic compounds would likely follow the same course if legalized at the state level.

On this note, one thing I would like to see on a future ballot initiative to legalize psychedelic compounds is statutory guidance for companies and individuals. One area, in particular, would address the use of natural plants and mushrooms as a reasonable workplace accommodation.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

Workplace StressThe Michigan Dept. of Labor and Economic Opportunity (LEO) established a dedicated workgroup to focus on mental health, trauma, and resiliency in the workplace. The workgroup recently released its findings. The report also offers strategies for employers to help build supportive workplaces by integrating employee mental health strategies that establish healthier workplaces, enhance employee wellbeing and promote resilient companies

Background for the Working Group’s Recommendations: 

The LEO workgroup consisted of employers, workers, and professionals brought together to discuss how workplaces can implement supportive and empowering strategies, while also highlighting organizational opportunities for better workplace environments.

In sum, the report details the findings of the workgroup and key strategies for employers to help build supportive workplaces by integrating employee mental health strategies that establish healthier workplaces, enhance employee wellbeing and promote resilient companies. Here are five recommendations to help companies focus on overall wellbeing and strategies to reduce workplace stressors that may lead to crisis:

  • Assess Workplace and Culture
  • Consider Workplace Policies, Practices, and Procedures
  • Recommit to Employee Assistance Programs
  • Consider adding or expanding Employee Resource Groups
  • Consider adding mental health to joint employer or employee safety committees

Additionally, the workgroup made recommendations for the State to consider in supporting mental health practices in the workplace. Among these recommendations are:

  • Give preference for businesses incorporating employee mental health improvement strategies through the State’s procurement or grant processes.
  • Offer financial support from the State for businesses to implement employee mental health improvement strategies.
  • Develop a resource hub that allows various groups to access plans, policies, and other information that is being used by employers in Michigan.
  • Continue workgroup efforts that identify specific workplace challenges and opportunities for specific industries (e.g., healthcare, manufacturing, education, service workers, and so on.).
  • Develop Michigan-specific data tools for tracking progress on improving workplace mental health and safety.

Here is a link to view the full report from the Mental Health Workgroup. Also, there is a virtual meeting on Wednesday, June 8 at 2:30 p.m. to learn more about the details of the report. Here is a link to attend that meeting.

Closing Thoughts:

Too often, mental health is either ignored or becomes the focus for scapegoating the most recent tragedy. Hopefully, with this Report, that will begin to change.

In theory, building mental health strategies in the workplace makes sense in attracting employees, promoting a positive effect on employee wellbeing, and helping protect the employer’s bottom line.

In regard to this last point, much of the employment discrimination claims we see often stem from toxic to dysfunctional work environments. Correcting these environments or giving employees resources to respond could go a long way to reducing legal spending for workplace discrimination claims.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

 

Trade secret misappropriationA recently filed trade secret misappropriation lawsuit in the Michigan Eastern District Federal Court is a good reminder for both employers and individuals about the dangers stemming from not protecting or wrongfully using confidential or trade secret information.

Going Deeper:

The lawsuit was filed on behalf of Van Dyke Horn LLC, a public relations company. The complaint accuses three former Van Dyke Horn employees of violating their non-solicitation and non-compete agreements and misappropriating confidential information for their new employer and competing venture co-defendant VVK PR & Creative.

Here’s an excerpt from the complaint, Van Dyke Horn LLC v Peter Van Dyke:

This case is about an equity member, officer and high-level executive of VDH, Peter Van Dyke, intentionally diverting and misappropriating trade secrets of VDH and converting assets of VDH, including clients, for his own benefit after failing to force his partner, Marilyn Horn, to sell her interest in VDH to him for pennies. And, Van Dyke was not working alone. Van Dyke was conspiring with VDH competitors, Sherman and Walters, to take VDH trade secrets and business for their own and a competing company, VVK, they were in the process of forming. In fact, Van Dyke was so brazen and felt so entitled that while he was still an equity member of VDH with fiduciary duties owed to it, he secretly solicited and convinced several VDH’s key employees to join him and the other Defendants in their secret scheme, all the while knowing that these same employees had restrictive covenants in their VDH employment agreements, and tried to convince prospective VDH staff to reject their offers from VDH and instead join VVK. Days before resigning from VDH, Van Dyke secretly loaded up VDH client files and corporate information into two large zip files and emailed them to his personal email so that he and Defendants could utilize them to compete.

* * *

Indeed, the focus of their secret business plan, which was found after a search of Peter Van Dyke’s VDH issued computer, was to convert VDH clients and the contracts they renewed each year to their competing company, VVK.

Why this lawsuit matters to employers and departing employees:

Of course, it bears remembering there are usually three sides to every story (the plaintiff’s, the defendant’s, and the story the judge or jury believes). And certainly, the Defendants will have their story to tell (as of this post, no response to the complaint was filed).

But even at this early stage, two important universal truths relating to the lawsuit are worth discussing:

  • First, employers must be hyper-vigilant about protecting their confidential, proprietary, and trade secret information. And that protection must be done ahead of time. For instance, the plaintiff, in this case, alleges its business information was protected by post-employment restrictions found in employment with agreements, the company’s operating agreement, and non-compete protections.
  • Second, exit interviews can be critical for discovering red flags about potential misappropriation. Here, the complaint explains the plaintiff asked the main defendant (Peter Van Dyke) before his employment ended to sign a declaration confirming he returned all property and confidential information. This declaration was obviously drafted by legal counsel because it expertly included important points and admissions that would be useful in prospective litigation over the misappropriation and use of the company’s property. Not surprisingly, Van Dyke refused to sign it. And not surprisingly, this refusal raised suspicions that resulted in uncovering evidence of the defendants’ scheme.

Closing Thoughts:

I’ve represented clients – both businesses and individuals – in trade secret misappropriation and noncompete disputes for about 20 years. And I am still surprised how often smart individuals will overlook the importance of digital evidence.

In this regard, the Van Dyke Horn complaint is full of references about digital fingerprints pointing to defendants’ wrongful conduct, e.g., zip files, emailing business information, and (if true, incredibly dumb), storing the details for how the defendants intended to wrongfully compete against their former employer on the employer’s company laptop.

And employers often neglect digital evidence too. For example, I’m representing a defendant in a non-compete dispute pending in Oakland County Circuit Court. The plaintiff and former employer, Save-On Everything, has made various representations about the misappropriation of its confidential or trade secret information. Yet our defense has shown these representations have no factual or legal merit.

For example, Plaintiff’s President, Heather Uballe, was forced to admit at her deposition that the company has no evidence to support the claim:

  • Question: The Amended Complaint, paragraph 14, referenced Save On’s confidential information includes prospects, opportunities, programs, including advertising, et 11 cetera …? Why is this information in
    here about the confidential information? How does it relate to your lawsuit?
  • Answer: It’s to prevent … [i]t from taking place.
  • Question: But you’ve already told me that he didn’t take [it]. You have no evidence that he took it. Your attorney said so as much.
  • Answer: Through today, yes.
  • Question: How would he go back and get the information if he’s no longer employed?
  • Answer: I’m not sure.

Under a court order, Save On has already paid over $1,400.00 in monetary sanctions in its lawsuit for other frivolous representations made in the lawsuit. And more sanctions may be on tap if Save On persists in making fact-free claims about misappropriation.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

Covid Religious Discrimination ClaimsOn May 17, 2022, the Mayo Clinic was sued by a former employee who believes her religious freedoms were violated by the Clinic’s workplace vaccine policies. Notably, Mayo Clinic accepted the plaintiff’s request for a religious exemption from its vaccine requirement. But the employee, Sherry Ihde, claims Mayo Clinic’s requirement that employees exempt from the vaccine requirement must undergo weekly testing also conflicted with her interpretation of Scripture.

Why it Matters:

In response to the Covid-19, employers implemented policies like the Mayo Clinic. And like the Mayo Clinic, many employers agreed to provide some measure of religious exemption from vaccine requirements but not from testing requirements. While many of these vaccine requirement policies have been withdrawn, in their wake employers will likely see more religious discrimination litigation that second-guesses how they responded to the Covid-19 pandemic.

Going Deeper:

The Mayo Clinic implemented a workplace vaccine requirement in October 2021. Under this policy, employees had to be vaccinated against Covid-19 by December 3, 2021, or be terminated. Or employees could be approved for a medical or religious exemption. In this regard, Mayo Clinic even provided employees with exemption forms for requesting such exemptions.

When Mayo implemented its vaccine policy, Ihde worked as a supervisor in Mayo’s Bacteriology Lab in Rochester, Minnesota. While Ihde did not have direct contact with patients, she supervised the Bacteriology Lab and had to meet with staff.

In her complaint, Ihde explains she considers herself to be a Christian. She did not identify any branch of Christianity she follows, any church she attended, or any congregation she belonged to. Instead, Ihde believes, “based on her interpretation of Scripture, that her body is a Temple to the Holy Spirit and it violates her conscience to take the vaccine.”

Fortunately for Idhe, her request for a religious accommodation from taking the Covid-19 vaccine was granted. Yet this was not good enough. Specifically, Ihde  believes under her interpretation of Scripture that “frequent medical testing for Covid-19 also violates her religious beliefs.” Thus, she should have also been exempted from this requirement. Mayo disagreed and placed Ihde on administrative leave and then in February 2022, Mayo terminated Ihde.

So she sued claiming Mayo failed to tailor its workplace policy to accommodate her religious beliefs under Title VII of the Civil Rights Act, and she was discriminated against under the Americans with Disabilities Act, and related state law claims.

This lawsuit was just filed on May 17, 2022. No response has been filed by the Mayo Clinic. Thus, it is way too early to make any predictions about how it will turn out.

Thoughts on the Lawsuit:

Religious discrimination often represents the most challenging workplace issue employers face. This is because a “religious belief” may be widely accepted or unique to a single employee. Either way, employers are generally prohibited from discriminating or retaliating against employees based on sincerely held religious beliefs.

Under Federal law, employers must provide employees or prospective employees “reasonable accommodations,” unless to do so would create “undue hardship.” In contrast, Michigan’s anti-discrimination statute imposes no affirmative duty to accommodate an employee’s religious beliefs.

With this background, the “body is a Temple to the Holy Spirit,” line that sprung up in response to workplace vaccine policies. I’m mostly an amateur Bible scholar, but I understand it mostly stems from  1 Corinthians 6:19-20. In that verse, Paul says, “do you not know that your body is a temple of the Holy Spirit within you … therefore glorify God in your body.” The quote, however, is under the heading “Flee Sexual Immorality.” And Paul was giving this warning in the context of discussing why exploiting prostitutes is not really something God goes for. There is no mention of vaccines. Even so, judges often avoid weighing in on the details, merits, or use of out-of-context Bible verses that may be used to support a particular claim.

Instead, judges and defendant employers will often focus on whether the religious accommodation imposes an undue cost or burden. This is shorthand for more than an insignificant, minor hardship on the employer. Examples of such costs and burdens include workplace efficiency and workplace safety.

In our representation of a company sued over religious discrimination, we successfully argued the plaintiff should lose on the accommodation issue, as well as for other reasons. See Mathews v Lavida Massage Franchise Development, Inc. Case No. 13-cv-12587, where the Court granted our motion for summary judgment. Similarly but even more persuasively, the Mayo Clinic vaccine testing policy was made in the context of a worldwide virus that has killed millions. So its vaccine or testing requirement will likely be a challenge for employees like Ihde to overcome.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals in religious discrimination claims, including obtaining dismissals of such claims for his business clients.  

COVID vaccine regulation

On September 9, 2021, we explained that OSHA would be issuing an emergency rule requiring companies with 100 or more employees to require their workforce to be vaccinated or to undergo weekly testing. See OSHA to Issue Vaccine and Testing Mandates to Large Employers. And we also predicted that the rule would generate legal challenges.

As to both points, OSHA issued its rule on November 5, 2021. And on Saturday, November 6, 2021, a U.S. Court of Appeals for the Fifth Circuit in Louisiana temporarily blocked a new coronavirus vaccine requirement for certain businesses.

In issuing the ruling, the Fifth Circuit panel only offered the statement that it “believe[s] there are grave statutory and constitutional issues with the mandate.” While short on reasoning, the Order also directed the government to respond by 5 PM on Monday to the lawsuit’s request for a permanent injunction.

The ruling has no immediate effect on employers or individuals. This is because companies affected by it had until December 5 must require unvaccinated employees to wear a mask indoors. Next, companies would have until January 4 two require employees to be vaccinated or start weekly testing of employees who refuse to be vaccinated.

Going Deeper:

OSHA issued its regulation under the Occupational Safety and Health Act. In response, the lawsuit was filed by a group of businesses, religious groups, advocacy organizations in several states including Louisiana and Texas challenging OSHA’s use of this Act. The lawsuit argues the coronavirus vaccine mandate should be passed by Congress, not OSHA. So the core issue that the Court should ultimately focus on is whether OSHA exceeded its authority in issuing its vaccine requirement rule.

What does this mean for you: 

First, this ruling has nothing to do with a vaccine requirement a company decided to implement on its own initiative. Our office has fielded many inquires following this ruling from individuals interested in avoiding an employer’s vaccine requirement using the Fifth Circuit ruling.

Second, it is unclear whether this Temporary Restraining Order will be extended. An injunction is a very high bar to reach. And, as we previously noted, there are several facts for why an injunction should not be extended. Consider for example:

  • OSHA is permitted to issue temporary emergency standards to new hazards that pose a risk to employees.
  • The first COVID-19 emergency standard was issued by the Trump administration; and
  • OSHA has previously mandated vaccines in relation to hepatitis B.

In sum, while OSHA’s COVID-19 rule is expansive, it is not one without precedent, it originated from President Trump’s administration, and is now carried out by President Biden’s administration based on both precedent and actions by the prior administration. If OSHA’s regulation is delayed by the Fifth Circuit, the Biden Administration is signaling it will appeal the ruling to the U.S. Supreme Court. Whether a majority of the Justices will side with these facts or choose to clear another legal path is anyone’s guess.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws. And since the coronavirus pandemic began, he’s helped many employers and employees navigate COVID-19 obligations and regulations with an honest, spin-free assessment.

Springing noncompete restrictions on job applicantsCVS Pharmacy Inc. sued online pharmacy retailer Capital Rx Inc., claiming the web-based business is trying to keep a former employee from working for CVS. The lawsuit, filed on 9/16/2021, claims Capital Rx’s noncompete agreement violates Massachusetts law.

Why It Matters:

CVS’ lawsuit highlights an all-too-common issue new hires often face – the surprise non-compete restriction. Unfortunately, this surprise is often sprung after someone accepts a new job and gives their resignation notice to their employer. It is a bad situation for the person who now has little to no practical options. And it is not good for the new employer to start an employment relationship like this. 

Going Deeper:

Suresh Yarlagadda, a pharmacist, briefly worked for Capital Rx from May until late July. The suit alleges Dr. Yarlagadda worked exclusively from Massachusetts. Captial Rx is based in New York.

In August, when he joined CVS, Capital Rx told him he could not work for CVS because of the noncompete restriction. According to the lawsuit, that restriction was “buried” in an 11-page document he signed just before he started working at Capital Rx.

The lawsuit claims the noncompete restriction is illegal under Massachusetts law for several reasons. Among those reasons, CVS argues Capital Rx gave it to Yarlagadda too late in the hiring process. The Massachusetts law requires a noncompete agreement to be provided to an employee when the job offer is made or 10 days before the employee starts, whichever is earlier. But Capital Rx gave Dr. Yarlagadda the noncompete restriction about a month after making the offer and one day before he started work for Capital Rx. 

This case is pending in U.S. District Court for the District of Massachusetts, CVS Pharmacy Inc. et al. v. Capital Rx Inc., Case number 1:21-cv-11526.

What you can do:

Fortunately for Dr. Yarlagadda, CVS decided to sue to invalidate the noncompete restriction. Just as often, the job applicant in Dr. Yarlagadda’s position has the job offer rescinded or delayed (without pay) and is left to fend for themselves.

There are no requirements for when a noncompete agreement must be disclosed to a new hire under Michigan law. It is no wonder workers often feel they have been “trapped” – having accepted the offer and given notice of their resignation, they cannot go back to the old job. And their voluntary resignation means they won’t be eligible for unemployment. For employers, is this how you want to begin the new employment relationship? 

Many noncompete disputes we become involved in begin with the facts described above. Yet it is unfortunate because many of those disputes could be avoided with better HR procedures; just disclose up-front that a job offer will require signing a noncompete or other post-employment restriction. For these reasons, a prescribed mandatory disclosure requirement like the Massachusetts law could make a lot of sense (but other provisions of the law not so much).

In the meantime, those considering new job offers should:

  • Ask upfront if the position will require a noncompete or other post-employment restrictions.
  • If a noncompete restriction will be required, get a copy early in the interview process.
  • Take time to understand the restrictions. We routinely collaborate with job applicants on whether the restrictions are too onerous or otherwise problematic.
  • Try to negotiate those restrictions into something more reasonable. If the restrictions can’t be scaled back, at least you know before effectively closing the door on your current job with a resignation notice.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or Michigan’s noncompete law. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.

Dreadlock race discrimination A Michigan bill to amend Michigan’s principal anti-discrimination statute to explicitly ban race-based hair discrimination, e.g., prohibiting discrimination based on hair texture and style, has stalled in the state legislature.

Specifically, Michigan House Bill 4275, also called the CROWN Act (an acronym standing for Creating a Respectful and Open World for Natural Hair), was introduced in the House of Representatives in February 2021. However, since then, the bill has yet to move through the Republican-controlled Judiciary Committee.

Michigan’s Elliott-Larsen Civil Rights Act prohibits discrimination in employment, education, and housing based on “religion, race, color, national origin, age, sex, height, weight, familial status, or marital status.”

The CROWN Act would amend Michigan’s Elliot-Larsen Civil Rights Act to add:

“Race” is inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles. For purposes of this definition, ‘protective hairstyles’ include, but are not limited to, such hairstyles as braids, locks, and twists.”

A leading hair discrimination case illustrates the challenges facing employees. The case, EEOC v. Catastrophe Mgmt. Solutions, involved a black female job applicant whose offer of employment was rescinded under the employer’s grooming policy and after she refused to cut her dreadlocks. At the time, the employer, Catastrophe Management Solutions (CMS) had a grooming policy which read as follows:

“All personnel are expected to be dressed and groomed in a manner that projects a professional and businesslike image while adhering to company and industry standards and/or guidelines. . . . [H]airstyle should reflect a business/professional image. No excessive hairstyles or unusual colors are acceptable[.]”

The EEOC argued that the policy banning dreadlocks in the workplace constituted race discrimination because dreadlocks are a racial characteristic — they “are a manner of wearing the hair that is physiologically and culturally associated with people of African descent.” The district court disagreed and dismissed the case.

On appeal, the Court agreed with the dismissal, holding that while dreadlocks were a manner of wearing hair that was common for black people and suitable for black hair texture, they were not an immutable characteristic of black persons. And therefore, an adverse employment action based on a black hairstyle (a mutable choice) is not protected under Title VII. In 2018, the U.S. Supreme Court declined to hear the case.

Without legislation like the CROWN Act and because of cases like EEOC v. Catastrophe Mgmt. Solutions, employers will often be able to use guidelines that call for “professional” or not “extreme” looks to prohibit hairstyles that disproportionately lead to bias against black employees. Yet for many reasons employers should consult with their employment law specialists before implementing or enforcing such policies. Here are two reasons:

First, city and county governments may have explicit prohibitions against taking adverse employment actions relating to hair. For example, earlier in 2021, Ingham County passed – the first in Michigan – a resolution banning hair discrimination. Ann Arbor followed with its own ban against race-based hair discrimination.

Second, if a grooming policy is not properly implemented or enforced, then a company could be looking at defending a race discrimination lawsuit. This is what the defendants in Hyundai Motor and other defendants are facing after their motion to dismiss a discrimination lawsuit stemming from – in part – a black woman’s dreadlocks was partially denied. See Key v Hyundai Motor Mfg. (pending in Alabama District Court). There, the Court concluded in its August 2021 opinion that unlike EEOC v. Catastrophe Mgmt. Solutions, an alleged statement by a supervisor suggests that the enforcement of the anti-dreadlock policy, as applied to the plaintiff, was not solely about her hair—but was instead a proxy for her race.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article or complying with Michigan or federal employment laws. Since 2001, Mr. Shinn has represented companies and individuals concerning the issues discussed above and other employment matters under federal and Michigan employment laws.