Archives for November 2013

Protecting Against Competition by Former Employees Requires Advance Planning

Protecting information that makes a business successful is a central part of every company’s plan. Employees are never permanent fixtures, and fewer work long-term than they used to. It’s wise, then, to anticipate that they will depart at some point and protect business interests through well-crafted confidentiality and/or noncompetition agreements. The damages that can otherwise flow from an employee’s move to a competitor can undermine profitability or, in some cases, even threaten a company’s survival.

Preventing problems like those requires advance planning. A good place to start is with organization. Businesses must understand the types of information to safeguard and be certain to control how that data is stored, how it’s used, and who has access to it. It’s common to protect pricing material; customer lists; product plans; customer purchase and sales histories; marketing information; and other information that is central to business success. Companies should ensure that only those who need such data at work have access to it. They should maintain rules for data use and ways to track it. Information commonly used or known by some employees – customer contract information, e.g., or pricing structures – are best stored on computers or in files at company offices. [Read more…]

Employers should Audit Wage Practices before Someone Else Does it for Them

When a company’s employee numbers start to grow, so too does its exposure to a plethora of wage and hour rules. A small business can become “enlightened” about one or more of them in a number of ways, from a complaint by a disgruntled former (or current) worker to a random audit by governmental authorities to a class action lawsuit by opportunistic lawyers. Violations of the law can bring substantial damages that may include civil penalties, tripling of unpaid wages, and reimbursement of an opponent’s legal fees.

In most cases, complaints from individual employees can be handled expeditiously. It’s when employees join together in class action suits or employers are audited by state or federal labor authorities that damage exposure becomes dangerous. Audits are common in Massachusetts and can revolve around worker classifications, weekly wages or overtime payments, contributions to the unemployment fund, and other issues. As companies grow, then, they should audit their own policies in these areas to ensure they comply with applicable laws. Waiting to do so until an auditor or a lawsuit arrives at the door can cost tens or even hundreds of thousands of dollars. [Read more…]