Tag Archives: Nicole Snyder

March 28, 2012

A Checklist to Use before Discharging an Employee

By Nicole C. Snyder

          Clients often ask us to help assess the legal risk and proper procedures for discharging employees.  The following list is not exhaustive, but it provides a helpful starting point for considering almost any termination of employment:

 1.    Do I fully understand the facts surrounding this employee?  Have I done a full investigation of why this employee is being selected for termination?

2.    Have I assembled this person’s records?  Is the personnel file in order?

3.    Have I read any company policies/employee handbook provisions that are relevant to the situation to be sure we are complying with them?

4.    Is my decision to discharge this person (or the supervisor’s decision) based on facts, not suspicion or emotion?

5.    Is the employee subject to a collective bargaining agreement that must be followed?  If so, are we following it?

6.    Has the employee received at least one warning of possible dismissal or at least some prior notice of significant performance issues?    Do we have documentation of these warnings or instances?  Has the employee had some reasonable time and opportunity to correct the performance problems?

7.    Does this employee have an employment agreement or any other kind of agreement concerning the term of his or her employment? If so, is the employee an at-will employee, or can he or she only be terminated in certain situations and pursuant to procedures set forth in the agreement?

8.    Has this employee signed a noncompete or confidentiality agreement?  If so, have I consulted with legal counsel to determine whether the noncompete agreement is enforceable and determined what type of communication to use during the termination meeting concerning these post-employment restrictions?

9.    Have I checked the company policies/employee handbook to be sure that I am complying with any warning systems?

10. Does this employee have any kind of equity interest in the company, such as stock, membership units, or options?  If so, have I worked with the corporate department or legal counsel to be sure we are addressing those interests correctly? 

11. Have personal difficulties or special circumstances been taken into account, such as family or medical conditions?

12. Is dismissal in this case consistent with past practices?

13. Would the company be able to justify the decision if he/she claims discrimination or unjust dismissal?

14. Has this decision been discussed and approved by higher management or any other person in the company that needs to approve it?

15. Have I scheduled the dismissal/exit interview to minimize the employee’s personal contact with other employees before he/she leaves the premises?

16. Have I arranged for two people to be present at the dismissal/exit interview?

17. Have I arranged for the final paycheck and am I prepared to explain the amount?

18. Do I know what group insurance the employee has and am I able to explain what will happen to it after dismissal?

19. Have I decided what restricted statements will be made to other employees concerning this person’s discharge?

20. If the employee is being offered any form of severance pay, have we considered a severance agreement so we can obtain a release of claims from this employee?

21. Would a jury conclude that our treatment of this employee was fair?

22. Are there any special circumstances that should be fully evaluated with legal counsel prior to the termination?  For example, does this termination fall within the legal “caution zone”?

  • Employee has a medical condition or has recently been on any type of leave
  • Employee is in a suspect class protected by discrimination laws (for example, the employee is female or over 40 or disabled or a member of a certain religious group or a racial minority)
  • Employee has complained recently about being harassed or working in a hostile environment
  • Employee has brought important problems to the company’s attention recently (for example, has notified management that the company is potentially doing something illegal)
  • Similar employees have not been discharged for the same behavior this employee is being discharged for
  • More than one employee is being discharged at or about the same time

January 22, 2011

Understanding the Idaho Trade Secrets Act and its Relevance to Former Employees

by Nicole C. Snyder

It is often concerning when an employee is discharged or quits her job and goes to work for a competitor.  In the absence of a non-competition agreement, the former employer may claim that the employee has stolen trade secrets and used them in her new job.

Idaho has adopted the Uniform Trade Secrets Act, codified under Idaho Code § 48-801, et seq.  The Act prohibits the misappropriation of “trade secrets,” defined as:

[I]nformation, including a formula, pattern, compilation, program, computer program, device, method, technique, or process, that:

(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy… .

If an employer claims a former employee has violated the Trade Secrets Act, is the claim likely to succeed?

Maybe. It is important for employers to recognize that there are significant limitations on the protections against former employers under the Trade Secrets Act.  In a very recent case, Wesco Autobody Supply, Inc. v Ernest, the Idaho Supreme Court recited this language from a prior decision:

[T]he legislature did not intend the [Idaho Trade Secrets Act] to be read so broadly as to preclude the hiring of an employee from a competitor; the legislature also did not intend that merely hiring a competitor's employee constitutes acquiring a trade secret.”  Instead, “[a]n employee will naturally take with her to a new company the skills, training, and knowledge she has acquired from her time with her previous employer. This basic transfer of information cannot be stopped, unless an employee is not allowed to pursue her livelihood by changing employers.

In the Wesco case, the Court found it was possible that one employee violated the Trade Secrets Act when the employee took and used the former employee’s customer lists, lists showing customer buying preferences, history of customer purchases, and custom paint formulas.  The Court, however, was unwilling to say that other employees had violated the Trade Secrets Act based merely on the fact that their customer relationships caused the customers to follow the former employees to a new employer.

In sum, if a company’s leadership is worried about the risk of employees working for a competitor and using the knowledge and relationships they built for a competitor’s advantage, then reliance on the Idaho Trade Secrets Act may be inadequate.  In such cases, it is important to utilize carefully-crafted noncompetition agreements.