Hire a Great Candidate, But Avoid a Lawsuit (Part II)
By Bud Bobber
As mentioned in last week’s Employment Law Update (http://tinyurl.com/33bbx45), often the best candidate to hire is an individual who has successfully worked in a similar role in your industry. To further decrease the chances of a lawsuit, consider these additional proactive steps to minimize the risks:
- Make employment expressly contingent on the individual’s respect for the confidentiality of the former employer’s information. For example, the offer letter could say:
[New company] desires to employ you because of your general industry knowledge and experience, your skills, and your strong personal traits. We do not want to improperly access your prior employer’s confidential business information. Therefore, you understand and agree that as a mandatory condition of your employment with [new company], you shall not disclose or use any conditional business information of any prior employer that you have a duty to retain as confidential. Any violation of this requirement will result in corrective action, up to and potentially including termination of employment.
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Tell the new hire to comply with the current/former employer’s policies, including offering a notice period (two weeks, typically), submitting to an exit interview, and even offering to discuss with his/her last supervisor the status of projects and location of information in paper and electronic files. While the candidate need not offer information about his/her new employer or the scope of the new job’s responsibilities, the candidate should be truthful if asked. (A string of lies will contribute to a claim that the individual is up to no good.)
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At the outset of the new employment, have the individual identify those specific projects, communications, or responsibilities that would likely require him/her to disclose or use some confidential information of the former employer. Figure out and implement some type of screening mechanism on that particular topic.
If the former employer threatens to sue, you might choose to disclose to them the extent to which you implemented these proactive steps. Even if they do not believe that these fully and effectively protect their confidential information from competitive misuses, they will likely recognize that these drastically reduce their ability to convince a judge that the employee and your company, as the new employer, are up to no good and must be stopped. Many lawsuits can be avoided if the hiring employer smartly follows a process and creates an evidentiary trail that demonstrates the opposite.
The Expanding Reach of the OFCCP — Are You a Government Contractor?
By Jeff Kopp
We’re not a government contractor?! Or so you thought. Many employers are, in fact, government contractors because they have a federal contract or subcontract with the federal government, or participate in federally assisted construction projects (i.e., DOT funds given to states and then states issuing contracts to contractors). Being a government contractor requires compliance with the laws enforced by the Office of Federal Contract Compliance Programs (OFCCP), which prohibit discrimination based on race, color, religion, sex, national origin, disability, and veteran status and, in some cases, impose affirmative action obligations on contractors. Contractors also are subject to OFCCP audits and compliance evaluations.
The OFCCP has had its sights on increasing its jurisdiction for several years. Last week, a Department of Labor administrative law judge (ALJ) confirmed that OFCCP’s jurisdiction includes many health care providers that previously were thought to be outside the OFCCP’s purview. OFCCP v. Fla. Hosp. of Orlando (http://tinyurl.com/33gyugw). The ALJ ruled that the Florida Hospital of Orlando is a federal contractor because it entered into a contract with Humana Military Healthcare Services, Inc. (HMHS), a company that directly contracted with TRICARE, the Department of Defense’s health care program for active duty and retired military and their families. Under the HMHS-TRICARE contract, HMHS provides networks of health care providers, including physicians, hospitals, skilled nursing facilities, and behavioral health professionals. Florida Hospital is one of those providers, receiving more than $100,000 annually for medical services. The HMHS-TRICARE contract did not refer to government contractor obligations for Florida Hospital.
Florida Hospital argued that it is not a federal contractor (or subcontractor) because it is simply a recipient of federal financial assistance, TRICARE does not consider providers under its network contracts to be subcontractors, and there were no federal subcontractor compliance provisions in its agreement with HMHS. The ALJ refuted each of these arguments, concluding that Florida Hospital was a contractor because it contracted to provide medical services directly to eligible recipients, TRICARE’s position as to whether providers are contractors is irrelevant, and the equal employment opportunity clause was incorporated by operation of law and did not have to be specifically included in the contract. Although the opinion may be appealed before November 1, 2010, if affirmed, the decision supports OFCCP’s position that it has jurisdiction over TRICARE health providers.
There are broad implications for this decision for TRICARE network providers. Principal among them is that providers should determine whether they must comply with government contractor requirements (http://www.dol.gov/ofccp/), which might include: developing an affirmative action plan under EO 11246, Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974; posting required notices; recordkeeping; performing compensation analyses; maintaining race, sex, and veterans data on hires, promotions, and terminations; filing contractor VETS-100A reports; and performing good-faith efforts to attract and maintain qualified minority, women, and military veterans.