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Palo Alto Employment Law Blog

Contesting the terms of an employment contract

At the law office of Kastner Kim LLP, we understand the variety of challenges that employees often face, whether they were recently hired or just lost their job. In Palo Alto, California, it is very important for workers who want to contest the terms of their employment contract to take the right approach and we work hard to help people who are in this position.

Sometimes, new employees may feel like the terms of their employment contract are not fair. On the other hand, a worker whose position was terminated may disagree with the way their former employer has interpreted the terms of their contract. When an employee has to deal with unfair contract terms, they may be affected in many different ways and it is essential for workers to identify any unfair terms right away. Unfortunately, some people do not pay close enough attention to the details of their employment agreement or are hesitant to contest the terms of an unfair contract.

What is a non-compete agreement?

If you were recently hired by a company and are reviewing an employee contract, there are many things you may have to take into consideration, such as retirement plans, compensation, severance and incentives. If you are wondering what a non-compete agreement is, you should make sure you thoroughly understand how this agreement could affect you. In Palo Alto, California, it is vital for every employee who is reviewing a contract to make sure their interests are protected, whether they were recently hired or are dealing with the recent termination of their job.

The U.S. Small Business Administration covers non-compete agreements on their website, providing useful information for people who are reviewing an employment contract and unsure of how these agreements could affect their interests. According to the SBA, employers use a non-compete agreement to prevent their former workers from revealing confidential information and working for their competition after they have left the company. In some cases, employees have taken advantage of opportunities to give sensitive information (such as formulas, programs, special techniques, etc.) to another business.

How prevalent is workplace retaliation?

From sexual harassment to civil rights violations, workers are subjected to all sorts of unfair and illegal violations of their employee rights in the workplace. However, far too many workers in Palo Alto, Santa Clara, and elsewhere in California have experienced workplace retaliation and it is essential for these workers to take action. Retaliation takes many forms in the workplace and victims need to recognize retaliation when it occurs (such as a worker being harassed, fired or demoted after filing a discrimination charge, for example).

While it is impossible to know exactly how many employees have experienced retaliation in the workplace (since some workers do not come forward), the U.S. Equal Opportunity Commission published statistics on their website which show just how many people have filed a retaliation claim with the EEOC. In fiscal year 2014, the EEOC reports that there were 37,955 individual charge filings alleging retaliation (under all statutes). Under Title VII alone, there were 30,771 individual charge filings over retaliation in fiscal year 2014. If you review the statistics, you can see an increase in the number of individual charge filings alleging retaliation over the years. For example, in fiscal year 1997, there were only 18,198 individual charge filings (under all statutes) due to alleged retaliation.

Understanding severance agreements

Many in Santa Clara come to see us here at Kastner Kim LLP after having been either laid off of terminated from their jobs. If this has happened to you, or you’re negotiating a new employee contract and want to be protected should you be fired, you may wonder what sort of severance benefits you can expect. If and when you leave a job, especially if you left involuntarily, you may be left without a direct source of income for quite some time. Thus, any compensation you can get from through a severance package could be invaluable.

According to the Department of Industrial Relations, upon the termination of your employment, your former employer only has to pay you whatever wages still due from your current pay period, along with any vacation pay that you’ve yet to use. There is no state law requiring employers to provide any further benefits.

Reviewing the rights of employee benefit plan participants

Other than their salaries, many workers in Palo Alto rely on one other major form of compensation: Employee benefits. The security that comes from knowing that one has healthcare coverage or that a portion of his or her wages are being stashed away for retirement is something that most American workers enjoy. Indeed, information compiled by the Bureau of Labor Statistics shows that as of March of this year, 66 percent of all employees in private industry had access to a retirement plan. Along the same lines, statistics also show that 35 and 16 percent of the total domestic healthcare premium for family coverage was paid by non-union and union workers, respectively.

Given the prevalence of employee benefit packages in the American workplace, it pays for workers to know what rights are granted to them through their participation. Those rights are granted to them through the Employee Retirement Income Security Act. According to the U.S. Department of Labor, they include:

  •          Full disclosure of all important information related to the plan: This includes an initial benefit summary, and a copy of the plan’s annual summary report.
  •          Documented evidence certifying membership in the plan: This can be insurance cards and retirement account certificates.
  •          The option to continue to receive group health coverage even after ending one’s plan participation: These benefits are referred to as Continuation of Health Coverage, or COBRA, plans.
  •          The expectation for fair and timely processing of claims: Employees should reasonably expect the benefits owed to them and not have to constantly fight for access to them.
  •          The right to recover benefits due through the plan: Reimbursement should be readily available for retroactive and disputed claims.

Frank Darabont amends wrongful termination claim against AMC

As is often the case when employees and employers in Palo Alto abruptly end their working relationships, a strong degree of distrust will often exist between them. That distrust can be further compounded should the employee initiate a wrongful termination claim. Some may view such action as being petty and vindictive on the part of the employee. Yet in many instances, it’s necessary in order to ensure that he or she receives compensation for his or her unlawful dismissal, and to ensure that his or her rights to any remaining interests or share holdings in the company are protected.

This appears to be the reason behind the latest round of action being taken by TV and film producer Frank Darabont against the television network AMC. Darabont was one of the original creators of the networks immensely-popular show “The Walking Dead.” Yet as many now know, his association with the show was suddenly ended after its first season. Shortly thereafter, Darabont filed a wrongful termination lawsuit against AMC.

Considering stock option grants as bonuses

Many of the executives with whom we’ve worked here at the Law Office of Kastner Kim LLP draw a good deal of their compensation from incentives based off of performance obligations. If you are in the early stages of negotiating a new executive contract, you may be contemplating whether or not the offer of stock options as a bonus is a good one. The answer to that question depends largely on two factors: your performance or that of your division or organization, and the overall strength of the market.

The basic idea behind offering stock options as a bonus is relatively simple: you are granted added shares based upon annual performance. At first glance, awarding equity or stock may seem to favor boards given that it typically takes extraordinary performance to influence share values. Thus, your year-end incentives may not be an accurate reflection of the actual work you and your teams did.

Legislation pushes for minimum wage to be raised to $15

Almost everyone in Santa Clara is probably familiar with the idea of minimum wage. Many have worked very hard to either educate themselves or the gain the experience required to rise above it. Yet what many may not be familiar with is the push currently happening from economists and policy makers to raise the national minimum wage.

Currently, the national wage is at $7.25. However, last year several high profile figures endorsed a proposal that would raise that to $10.10 by next year. Now, recent days have seen legislation introduced in the Senate that calls for a minimum wage increase to $15.00 by the year 2020.

Do I have to sign a non-compete agreement?

When you’re in the process of negotiating the terms of a new job in Palo Alto, you may be asked by your prospective employer to sign something similar to a non-compete agreement. The state has a specific non-compete statute that makes such agreements invalid in most cases. However, there are related laws that help companies to protect vital trade secrets from former employees who’ve left for positions with their competitors. Thus, while the agreement that your new company present may not be a non-compete agreement per se, it can limit some of your employment options should you choose to leave the company.

When deciding whether or not to sign your potential employer’s non-compete agreement, you need to take into account the potential consequences of your refusal to do so. The company does have the right to pull your job offer should you refuse. Yet don’t let the possibility of this happening scare you into signing it. Rather, you can use this opportunity to leverage other aspects of your pending employment contract.

Who can receive COBRA benefits?

When it comes to health benefit plans, it is vital for participants to understand the ins and outs of their plans and make sure their rights are not violated in any way. In Palo Alto, Santa Clara, and across California, people should be aware of how federal law can help protect employees and their families from problems concerning employee benefits. For example, the Consolidated Omnibus Budget Reconciliation Act, also known as COBRA, can help some retirees and former employees (as well as their dependent children and spouses) by offering temporary group health coverage that would have been lost.

With regard to receiving COBRA benefits, the Department of Labor outlines three components of qualifying for COBRA on their site. First, employers are subjected to COBRA rules if they have employed 20 or more people on over half of their normal days of operation in the past year. Next, the DOL covers qualified beneficiaries. A number of people may be considered beneficiaries, including employees who were covered under group health plans prior to a qualifying event along with their spouse and dependent children. There are different types of qualifying events, which cause individuals to no longer have health coverage. Furthermore, the amount of continuation coverage a COBRA beneficiary receives depends on which type of qualifying event they experienced. For employees, qualifying events include involuntary or voluntary job loss (except for instances of gross misconduct) and reduced work hours. For spouses and children, qualifying events also include a covered employee's death, divorce or entitlement to Medicare.

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