Issue 2 - 2010

Does your company allow non-exempt employees to commute to and from work in Company vehicles? If yes, do you pay them for the commute time? A recent federal appeals court found that non-exempt employees may need to be paid for their commute time in Company vehicles if they are "subject to the control" of the employer. (Rutti v. Lojack Corporation).

In this case, the non-exempt employee was required to drive the company vehicle, could not stop off for personal errands, could not take passengers, was required to drive the vehicle directly from home to his job and back, and could not use his cell phone for personal calls while driving. In addition, the employee's computerized scheduling system dictated the order in which he was to complete the day's jobs. Accordingly, the court decided the employee was under the Company's control while driving the Company vehicle even while commuting to and from work.

Since the non-exempt employee was under the Company's control while commuting, he had to be compensated for the commute; i.e. the commute was "on the clock."

Employers who allow non-exempt employees to commute in Company vehicles should review their policies in light of this decision. Other factors (e.g. liability concerns and insurance coverage) should also be weighed when updating policies.

Biosense Webster, Inc. is a developer/manufacturer of atrial fibrillation products and required certain employees to sign an "Employee Secrecy, Non-competition and Non-solicitation Agreement." Part of the agreement contained a non-solicitation clause which provided that the Employee "recognizes that the Company's relations with its accounts, customers and clients represents an important business asset that results from the Company's significant investment of its time and resources" and that the Employee has "gained or may gain relationships with the accounts, customers and clients of the Company, and because of such relationships, he could cause the Company great loss, damage and immediate irreparable harm" if the Employee should "sell, offer for sale, or solicit or assist in the sale of a product or service that could compete with the product or service being sold or developed by the Company." The Employee "therefore agrees" that for 18 months after termination of employment, the Employee "will not solicit any business from, sell to, or render any service to, or, directly or indirectly, help others to solicit business from or render service or sell to any of the accounts, customers or clients" with whom the Employee had contact during the last 12 months of employment.

Biosense Webster tried to enforce the agreement against one of its former employees for violation of the non-solicitation agreement. (Dowell v. Biosense Webster, Inc.) The Court would not enforce the agreement, however, finding it violated Section 16600 of the Business & Professions Code, which provides:

"Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."

Employers must continue to be cautious when drafting agreements which may restrain work. Also, all employers should review older agreements for non-compliant provisions, with experienced employment counsel's input.

An employer has a legal duty to use reasonable care to protect employees and business visitors against foreseeable criminal attacks. This obligation arises out of several sources including common law, Cal-OSHA and workers' compensation.

An employer owes a common law duty to its employees and visitors to use reasonable care in the selection and retention of competent employees, as well as a duty to provide adequate security against foreseeable criminal attacks on the premises. The duty to protect employees and visitors grows out of the special relationship between employer and employee and the general duty to exercise reasonable care in the management of one's property.

Employers also have a duty to provide a safe and healthy workplace under Cal-OSHA. Since homicides are a prevalent cause of workplace deaths in this country, Cal-OSHA applies to require employers to protect employees from violent situations. Therefore, employers who learn of threats of violence against employees should take reasonable measures to protect their employees, just as with any safety issue at the workplace.

In California, an employee's injuries are compensable under workers' compensation if the injury occurred while the employee was performing a service for the employer. Workers' compensation is based on the theory of strict liability, which holds the employer responsible for injuries which employees sustain during employment, regardless of who was at fault. Therefore, if an employee is injured or killed by another employee, the employee (or his/her family) may recover benefits.

In addition to those basic benefits, if an employee is injured as a result of the "serious and willful" misconduct of the employer, the amount of workers' compensation recoverable may be increased by one-half. This increased compensation is paid by the employer, not the workers' compensation insurer. An employer commits serious and willful misconduct when it deliberately fails to act to ensure the safety of its employees, knowing that such failure will probably result in injury to them. Failing to protect employees from threats of violence can lead to a claim of serious and willful misconduct.

What is an employer to do? Employers have used a variety of measures to assess the seriousness of threats, reduce the risk of violence and to protect themselves against liability in case of a criminal act. These measures include conducting internal investigations, using psychiatrists, psychologists or other mental health professionals to assess and/or diffuse potentially violent situations, hiring security personnel, obtaining court restraining orders, conducting background checks and improving security procedures at the premises. Because of the variety of potential preventative measures, some companies hire workplace threat coordinators to provide strategic guidance in all of these areas.

Companies must be dynamic when deciding what measures to take. For example, if a company initially decides not to use security personnel, but a background check later reveals that the perpetrator has a violent criminal conviction record, the company must reassess utilizing security personnel. Also, companies must coordinate all the measures to ensure that they are operating in concert.