On July 23, 2019, the Chicago City Council passed the controversial Chicago Fair Workweek Ordinance (the Ordinance). Once Chicago Mayor Lori Lightfoot, a vocal proponent of the Ordinance, signs it into law, the Ordinance is scheduled to take effect for the majority of covered employers on July 1, 2020.
Many employers have opted to use technology to their advantage by adopting biometric timekeeping systems or similar systems for workplace access. But adopting such technology is not without risk. Indeed, with data breaches on the rise, employees and consumers have become more vigilant about protecting their personal data and using state privacy laws and the like to do so. The Illinois Biometric Information Privacy Law is one such law that places restrictions on businesses that collect biometric information of individuals. That law defines biometric information as “any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier [i.e. ‘a retina, iris scan, fingerprint, voiceprint, or scan of hand or face geometry’] used to identify an individual.” 740 ILCS 14/10.
Employment Law Seminar
The Chicago FBA invites you to attend its Employment Law Seminar on Thursday, January 23, 2014. This program will feature eight judges from the federal and Illinois judiciary, including the Seventh Circuit Court of Appeals, the Northern District of
Illinois and the Circuit Court of Cook County, as well as representatives from the Equal Employment Opportunity Commission, University of Chicago Law School and private practitioners.
Do not miss this opportunity to hear firsthand from these experts about the ever-changing landscape of federal and state laws and regulations. Panel discussions will cover recent developments in employment discrimination law, procedural developments in individual and class litigation, settlement and mediation, and EEOC investigations and litigation, among other topics of utmost
importance to employment law attorneys, employers and employees.
To view the agenda and pricing information, click here.
Thursday, January 23, 2014
1 to 5 p.m.
Cocktails and Hors d’oeuvres to follow
Hosted by Drinker Biddle & Reath LLP
191 North Wacker Drive
3.75 Illinois MCLE credit hours*
Register online: www.fedbarchicago.org/employment-law-seminar
* FBA Chicago will be applying for accreditation for 3.75 Illinois MCLE credit hours. Continuing legal education credits for other states must be handled by individual attendees.
Cheryl Orr, partner in the San Francisco office, will be speaking on two panels at Drinker Biddle’s upcoming 2013 ERISA Insurance Symposium. This complimentary symposium, which will be held in the firm’s Chicago office on November 12 & 13, 2013, is intended for in-house counsel and those with ERISA compliance responsibility. It will feature panel discussions and breakout groups with a practical focus on developments and challenges for the recordkeeping divisions and affiliated broker-dealers of insurance companies operating in the qualified retirement plan market. Topics to be discussed include:
- Regulatory developments at the DOL and IRS
- Retirement income guarantees
- ERISA litigation and DOL investigations of service providers
Cheryl’s first panel, Technology Issues for Insurance Companies, will discuss data security issues, cyber risks, FINRA privacy concerns and the impact of the ADA on websites. Her second panel, Odds and Ends: Breakout Discussion of Issues and Problems, will include discussion for Broker-Dealers/RIAs on several topics, including: (i) Conflicts of interest issues; (ii) Ongoing challenges for broker-dealers arising under previously-sold variable annuity contracts; (iii) Employee vs. independent contractor challenges and mitigating risk; and (iv) Pension factoring.
To register for the symposium please visit the registration page here.
San Francisco Partner Cheryl Orr was quoted in a recent story in the Chicago Tribune on Illinois medical marijuana law and the legal implications for Illinois employers whose policies are at odds with the law. Some of the issues Illinois employers will need to confront include reconciling their drug-free work place policies with patients’ rights, what they can ask job applicants, how to deal with an impaired employee and whether or not an employer can punish an employee for engaging in what is now deemed to be a legal activity.
Cheryl submitted that the Illinois statute may offer civil employment protections for workers. One provision of the Illinois law appears to narrowly tie the ability to discipline a medical marijuana patient for failing a drug test to those employers who are specifically connected to federal work or funding. This framework, Cheryl wrote, “creates a plausible argument that the statute does provide protections” for medical marijuana users in the private sector.
LaborSphere previously looked at employer liability under the Illinois law, and other states who have laws providing for some form of legalized medical marijuana, and will continue to follow this ever evolving area of law.
Two recent cases should give employers pause as to whether their restrictive covenants with their at-will employees are enforceable. On May 28, 2013, a United States District Court in Massachusetts held that under Massachusetts law, a confidentiality agreement signed by an at-will employee was unenforceable where the employee’s title, duties, remuneration and other terms of employment had materially changed since signing the agreement. Then, on June 24, 2013, an Illinois Appellate Court held that unless an at-will employee is employed for at least two years, restrictive covenants the employee signed at the beginning of employment are unenforceable for lack of adequate consideration. Moreover, the Illinois court held it was irrelevant whether the employee quits or is terminated before two years of employment. While the rulings rely on the applicable state law, they address important points that may have broader application than only in Massachusetts and Illinois.
In Smartsource Computer & Audio Visual Rentals v. Robert March et al, D. Mass. (May 28, 2013), Smartsource filed an action to enforce its noncompete agreements with its former employee, March. March was hired by Smartsource in 2006 as a Senior Account Executive, and signed an offer letter with a simple confidentiality agreement/restriction. In 2007, March was promoted to Branch Sales Manager, in 2008 to Regional Sales Manager, in 2010 to Regional General Manager, and again in 2012 to Regional Sales Manager. With each change his job responsibilities and compensation changed. Citing to Massachusetts law, the court denied the requested injunctive relief to Smartsource. Although stopping short of a definitive ruling on the merits, the court noted that “it may well be under [Massachusetts case authority], March’s 2006 confidentiality agreement has been abrogated, and he is not bound by any restrictive covenants.” March and the Massachusetts cases cited therein suggests that when material changes to an employment relationship are contemplated, the employer should consider revisiting the existing restrictive covenant agreement and consider whether a new agreement is advisable.
More recently, the Illinois Appellate Court for the First District (Cook County) in Eric D. Fiefield et al v. Premier Dealer Services, Inc., (Ill. App. Ct., 1st Dist. June 24, 2013), answered the question as yet definitively unanswered in Illinois: What additional employment period after the signing of a restrictive covenant agreement is sufficient consideration to make the agreement enforceable against an at-will employee? The Court answered at least two years, even where the employee signs the restrictive covenant at the outset of employment. Fiefield had worked for the predecessor company that was acquired by Premier. Fiefield was then hired by Premier in late October 2009, and as a condition of employment Fiefield was required to and did sign an employment agreement containing a two-year restrictive covenant. Fiefield signed the agreement on October 30, 2009 and started work on November 1, 2009. On February 12, 2010, Fifield resigned to go to work for a competitor. Fiefield and his new employer then filed suit against Premier seeking a declaratory judgment that the restrictive covenant agreement was unenforceable. The circuit court ruled the agreement was not enforceable because it lacked consideration. Premier appealed and the Appellate Court affirmed, agreeing that there was inadequate consideration. The court held that regardless of whether Fiefield had signed the agreement before he started work or after he started work, “Illinois courts have repeatedly held there must be at least two years or more of continuous employment to constitute adequate consideration in support of a restrictive covenant…This rule is maintained even if the employee resigns on his own instead of being terminated.”
The Premier decision will surely send employers in Illinois scrambling to reconsider the validity of their at-will employee restrictive covenant agreements in Illinois. However, help may be on the way as Premier has filed a petition for leave to appeal the decision to the Illinois Supreme Court. Granting review is within the Court’s discretion, and the Illinois Chamber of Commerce and other employer groups are backing Premier’s bid. Even if the case is not reviewed or reversed, however, there are a number of possible solutions to the Premier consideration problem. These include offering employees consideration for the non-compete in addition to simply offering at-will employment (such as a “bonus” payment or possibly elaborating on the consideration offered to include, for example, training, access to customers and valuable confidential information and trade secrets) or offering employees some form of term employment contract.
If you have at-will employees with restrictive covenants less than two years old, and you view confidentiality and restrictive covenant agreements important to your business, or if your agreements with your employees significantly predate their current job positions, compensation and other conditions, these cases should sound the alarm to review your competitive advantage protections.