PLS 780Week 6

Agenda

• Discussion: Technology and the work environment• Employment and the law in the tech sector• Employment agreements

• Invention assignments• Non-disclosures• Non-competes• Forfeiture agreements• Non-solicitation agreements

• Employment separation• Executive employment agreements

Digital immigrants v. natives

• The tension between these two groups plays out at work in unexpected ways

• What do I mean?• Can you think of examples where digital natives

might have expectations that are at odds with those of immigrants?

Technology and the hunt for talent

• Legal issues arise from the get-go• Visitor’s confidentiality and non-disclosure

agreements• Anti-poaching or collusion (Todd v. Exxon)• Is anti-poaching inherently non-competitive?

Employment verification and eligibility

• Tech sector hires up to 10% of it’s employees form outside the US

• Employment and immigration are two hotly contested legal areas that abound in procedural complexities

• What should policy look like?• Who should bear the burden here? The employee or

the business (Appendix 9 I-9)

Employees and their rights

• Most employees are at-will; What does this mean?• Why is the US different from most industrialized

countries on this notion of at-will employment? What policies are being served?

• Handbooks govern the relationship between employees and employers

• What tech related issues must find their way into employee handbooks? How often should they be updated in order to accommodate technology changes?

Subcontractors and work for hire professionals

• Extremely popular in the technology sector• Non-employees contractually hired to perform

specific kinds of tasks• Problems arise when employees are treated like

subcontractors or contractors are treated like employees

• Must comply with employment law and wage and hour law

• Work for hire as a special subset defined by copyright law (Circular 9 reprinted in Appendix 10)

State v Kirby

• Facts• Issue• Holding• Rule• What does State v. Kirby tell us about managing

subcontractors and work for hire employees?

Unpaid interns

• Big part of the tech landscape• Numerous legal issues here• Why could the predominance of unpaid interns

undermine fair labor standards/wage and hour law in the US?

• Is there anything inherently wrong with unpaid labor in return for experience?

• What does legal compliance look like? (Appendix11) • What about state laws? Oddly there really aren’t

many if any…

Foreign workers in the US

• H1-B program• Restrictive employment; no movement (within

company or without) • Allows businesses to hire employees when they

can’t find qualified employees in the US• Lottery with no one country receiving more than 7

percent• Good policy? Why or why not?

Foreign workers outside the US

• Outsourcing• Off-shoring• Supply chain manufacturing partners• What rights and duties should govern the

relationships with these workers? If any…

The term of employment

• The handbook is a contract• Fiduciary duties• Duty of loyalty• Duty of care• What special role does technology pay in each of

these duties? Especially when secrets and processes can be shared so easily via technology?

Post employment

• Former employees also have rights and duties• Governed by contractual agreements• Termination doesn’t always end the relationship

Intel v Hamidi

• Facts• Issue• Holding• Rule

Employment Agreements

• Like all contracts, these represent an effort to formalize relationships based upon a bargained for exchange

• Policy issues are oftentimes front and center due to disparate level of power in the bargaining process. What does this mean?

Invention Assignment Agreements

• IAA• Employee invents; Company owns• Covers work created while an employee• The employee essentially assigns all rights and

duties that come from the invention to the employer• Issues can arise based upon the nature and scope

of the work, the assigned rights, the role of the employee

Mattel v MGA

• Who owns Bratz?• Facts • Issue• Holding• Rule

Non-disclosures and non-competes

• NDAs and NCAs• Varies by jurisdiction in terms of enforcement• Non-competes are the most litigated. Why?

• To be enforceable must be limited by time, place and scope

• Must protect a legitimate interest of an employer• California generally considers them void

Google v. Microsoft

• Facts• Issue• Holding• Rule

Forfeiture agreements

• Very powerful tool for managing tech employees• You leave, you lose• The thing you lose: Stock options• Most jurisdictions have absolutely no problem

enforcing these. Why?

Viad v. Houghton

• Facts• Issue• Holding• Rule

Stock options

• The right to buy shares in the company at a predetermined ‘strike’ price oftentimes well below the market value

• Right, not an obligation• Important tool in an industry that is very dependent

upon human capital rather than physical assets• Potential for abuse via securities fraud is very real

US v. Reyes

• Facts• Issue• Holding• Rule

Separation agreements

• What should these look like?• What should the goal be in terms of policy? What

should be enforceable? What shouldn’t be?• What role should future cooperation in return of for

things like severance play?• Are these truly bargained for exchanges based upon

consideration?

Executive employment agreements

• Different form rank and file contributors• Include bonuses, benefits, responsibilities, events

that trigger terminations, conditions for resignation