Encino Law | Encino Employers: Wage And Hours And Trade Secrets | | Asher Levin, Esq. |

Employers: Wage and Hours and Trade Secrets

The Los Angeles Daily Journal publishes a weekly section called "Verdicts and Settlements: recent trial results and settlements as reported by the participating attorneys." Although this section does not contain a report on every verdict and settlement, it tends to reflect major cases and legal trends. The June 20, 2008, Verdict and Settlements contained 34 cases of which over a third were employment cases. Of these, five were Wage and Hour cases, and six were (in one form or another) Wrongful Termination cases.

The 5 Wage and Hour cases all resulted in awards to the plaintiff, ranging from $44,639 to $3,500,000 (in a class action) and totaling over $6,700,000.

The Wrongful Termination type cases included two defense verdicts and four cases which settled with a payment to the employees: three cases settled for a total of roughly $300,000 and one case settled (after a jury verdict) for an award to a former employee of $2,375,000. This last Wrongful Termination case started as a lawsuit by the employer for violation of trade secrets. In that case, the employees were presented with mandatory agreements to sign which contained an overly broad non-competition clause, and an ambiguous non-disclosure agreement; those who did not sign were fired. They filed cross-complainants for Wrongful Termination - resulting in a multi-million dollar settlement.

A lesson that can be learned by employers just from a cursory examination of these cases is:

1. You must know and comply with the Wage and Hour laws. Wage and Hour rules are simply too harsh and the penalties too great to cut corners, to classify an employee as an independent contractor or an hourly employee as a manager exempt from overtime laws. You want to avoid Wage and Hour lawsuits.

2. You should have a viable Trade Secret policy in place, you should understand the limits on your ability to keep your employees from competing with your business and your rights with regards to protection of your client list and other Trade Secrets.

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