In early February, Earth Fare announced it would be closing all of its stores, likely meaning each of its 3,000 employees would be laid off. In response, two employees of the Asheville-based grocery store chain filed a class-action lawsuit alleging Earth Fare violated the Worker Adjustment and Retraining Notification Act (the “WARN Act”). Generally, the WARN Act requires employers with at least 100 employees to provide at least a 60-day advance written notice of plant closings and mass layoffs; however, the likelihood of success of the plaintiffs’ claims will be determined by the specific definitions provided in the WARN Act, as well as its exceptions and exemptions. The WARN…
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Can North Carolina Employers Compel Drug Testing and DNA Testing?
In December 2018, a Phoenix, Arizona woman, who spent the last fourteen (14) years in a coma, gave birth to a healthy baby. A police investigation concluded that, while in her comatose state, she had been raped multiple times. The staff at the healthcare facility where she was a patient stated that no one knew she was pregnant until she went into labor. In response to a search warrant issued to the employer, the employer requested that all male employees provide a DNA sample to determine whether the individual who impregnated the woman was a staff member. Without question, the facts of this investigation are shocking. However, it does…
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The Dos and Don’ts of Social Media and Your Job
Misusing social media can get you fired if you’re not careful. It can also cost you a prospective job, scholarship, or enrollment at a university. If you post something incendiary, self-incriminating, racist, or anything that otherwise casts the company you work for in a bad light, you might be fired for it. When combing through stacks of resumes that all begin to look the same, some employers or admissions officers may turn to the social media of candidates and applicants for more information and finding questionable or incendiary content may cost you as well. An increasing number of states are banning employers from requesting access to their employees’ and…
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Six Things Every Lawyer Should Know When Drafting a Non-Compete Agreement in North Carolina
When advising clients and drafting employment contracts with non-compete clauses, there are several things every lawyer should keep in mind. The general rule is courts will enforce non-compete clauses to the extent they are reasonably necessary to protect legitimate business interests.[1] In North Carolina, they must be (1) in writing and (2) signed by the parties.[2] The following seven tips will strengthen a typical non-compete agreement and increase its likelihood of enforceability in a court of law: 1. Know Your State’s Disclosure Requirements Some, but not all, states require employers to disclose the existence of a non-compete clause…
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The Strict Blue Pencil Doctrine is Alive and Well in NC Courts
In a time where pencils and pens are quickly being replaced by keyboards, styli, and even one’s own fingers, the North Carolina Supreme Court ruled last week that the strict blue pencil doctrine remains alive and well – at least when it comes to non-compete clauses in employment agreements. The blue pencil doctrine originated in 1961 and essentially states that if a non-compete clause in an employment contract is “unreasonably broad,” then the Court has the power to use its blue pencil to literally strike the over broad provisions from the contract. Last week, in Beverage Sys. Of the…
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A Primer on the North Carolina Wage and Hour Act: What Every Employer and Employee Should Know
Overview The North Carolina Department of Labor is charged with promoting the “health, safety, and general well-being” of more than 4 million workers in the state. The Wage and Hour Bureau of the North Carolina Department of Labor enforces the Wage and Hour Act of North Carolina.[1] This Act and its amendments protect employees by providing requirements regarding: (1) minimum wage; (2) overtime requirements; (3) wage (including bonus and commission) payments; (4) payments of promised benefits such as vacation pay; (5) child labor; and (6) recordkeeping. The majority of all North Carolina employees are covered by the North Carolina Wage and Hour Act (NCWHA), subject to a few…
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North Carolina Business Court: Employment Agreements Automatically Terminate Upon the Sale of a Company
A recent decision by the North Carolina Business Court held that an employment agreement automatically terminates upon the asset sale of one company to another, despite continued employment with the purchasing company.[1] In 2001, Andrew Lund executed an employment agreement with his then-employer, Southern Staircases of North Carolina, Inc. The agreement contained several post-employment restrictions regarding disclosing confidential information and soliciting current and future customers. The agreement also contained a duty of loyalty provision to “devote his entire working time, attention, and energies to the business of the Company and . . . [to] not be engaged in any other business…
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Fourth Circuit: Arbitration Agreement in Employee Handbook Not Binding
A recent decision by the United States Court of Appeals for the Fourth Circuit ruled that a North Carolina employee suing under federal and North Carolina law for wage and hour violations was not required to participate in arbitration despite an arbitration clause in her employee handbook.[1] The Fourth Circuit acknowledged that North Carolina law would ordinarily bind the employee via implied consent to the clause, but she signed an acknowledgement form upon receipt of the handbook that expressly stated the handbook provisions did not constitute a binding contract. Rose Lorenzo, an employee of Prime Communications, LP, managed a…
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North Carolina Business Court Weighs in on Enforceability of Non-Compete and Confidentiality Agreements Post-Merger
It is well-settled law that adequate consideration is required to create binding restrictive covenants such as non-compete agreements. Generally, such agreements are entered at the start of an employment relationship, and the new employment itself constitutes consideration. In North Carolina, continued employment following a merger of two companies does not satisfy the consideration requirement. In a recent decision, the North Carolina Business Court (“NCBC”) confronted the very issue.[1] In January 2012, AmeriGas Propane, Inc., a propane company that services over two million residential and commercial customers nationwide, merged with Shaw L.P. Gas. Ermon Coffey, an employee of Shaw, and…
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Eastern District of North Carolina Predicts the North Carolina Supreme Court Will Apply the Doctrine of Inevitable Disclosure “Under Certain Circumstances.”
The Eastern District of North Carolina recently decided a case affirming that, while North Carolina courts have not yet adopted the doctrine of inevitable disclosure, North Carolina would adopt the doctrine under certain circumstances.[1] Spirax Sarco, Inc., (“Spirax”), alleged a claim for, among other things, injunctive relief under the doctrine of inevitable disclosure against one of its former employees. Spirax purported that defendant Bryan Johnson (“Johnson”) used his company issued laptop to download thousands of confidential computer files to personal devices without permission. Johnson resigned from Spirax on May 27, 2014 to work for SSI Engineering, Inc. (“SSI…
