Dean P. Laing, of O’Neil, Cannon, Hollman, DeJong and Laing S.C, has been selected to the 2015 list as a member of the Nation’s Top One Percent by the National Association of Distinguished Counsel. NADC is an organization dedicated to promoting the highest standards of legal excellence. Its mission is to objectively recognize the attorneys who elevate the standards of the Bar and provide a benchmark for other lawyers to emulate.

Members are thoroughly vetted by a research team, selected by a blue ribbon panel of attorneys with podium status from independently neutral organizations, and approved by a judicial review board as exhibiting virtue in the practice of law. Due to the incredible selectivity of the appointment process, only the top 1% of attorneys in the United States are awarded membership in NADC. This elite class of advocates consists of the finest leaders of the legal profession from across the nation.

On April 30, 2015, the Supreme Court of Wisconsin issued its long-awaited decision in Runzheimer International Ltd. v. Friedlen, in which it came to the conclusion that the promise of continued at-will employment is valid consideration for a restrictive covenant.

In Runzheimer, the employee had worked for his employer for fifteen years when the employer required all employees to sign restrictive covenants or be terminated. The employee signed the restrictive covenant, but after he was terminated more than two years later, he went to work for a competitor in breach of that agreement, and the employer sued. The employee then claimed that the agreement was invalid because it lacked consideration.

In Wisconsin, forbearance in exercising a legal right is valid consideration. The Court reasoned that, because Wisconsin is an employment at-will state, companies have a legal right to terminate employees at any time for a good reason, a bad reason, or no reason at all, as long as it does not violate existing law or public policy. Therefore, giving up the legal right to terminate an employee at that moment in exchange for the employee signing a covenant not to compete is valid consideration.

The court emphasized that its holding in Runzheimer is consistent with its 1994 holding in NBZ, Inc. v. Pilarski where the Wisconsin Supreme Court held that the promise of continued employment did not provide sufficient consideration to support a restrictive covenant entered into by an existing employee. The Wisconsin Supreme Court distinguished its holding in NBZ by finding that, in that case, the employee’s employment had not been conditioned upon her signature and the employer did not promise to do anything else in exchange. Without these elements, there can be no consideration to support enforcement of the agreement under Wisconsin law.

Therefore, under the Wisconsin Supreme Court’s holding in Runzheimer, in order for continued at-will employment to be valid consideration for a restrictive covenant agreement, employers must condition the employee’s continued employment upon the employee actually signing the agreement. In order to maintain that position in any action that might challenge the issue of consideration, an employer must actually terminate any employee who refuses to sign the restrictive covenant for it to validly assert that continued employment was conditioned upon the employee’s signature to the agreement.

Wisconsin has now joined the majority of jurisdictions, which hold that a promise to continue an at-will employee’s employment is lawful consideration for a restrictive covenant. The Runzheimer decision now permits Wisconsin employers to require their existing employees to sign new or modified restrictive covenant agreements without promising employees anything more than continued at-will employment.

O’Neil, Cannon, Hollman, DeJong and Laing S.C. attorneys Christa Wittenberg and Grant Killoran recently contributed articles to the Spring 2015 Edition of the Health Law Litigation Newsletter published by the American Bar Association Section of Litigation.

Attorney Wittenberg, an associate in the firm’s Litigation Practice Group, authored an article entitled “The Constitutional Framework for Public Health Responses to Disease Outbreaks,” analyzing the role of federal and state government in responding to contagious disease outbreaks, such as the recent Ebola virus crisis.

Attorney Killoran, the Chair of the firm’s Litigation Practice Group and one of the State Bar of Wisconsin’s Delegates to the ABA House of Delegates, authored an article entitled “American Bar Association House of Delegates Update” discussing a number of resolutions passed by the ABA House of Delegates at the ABA Mid-Year Meeting in Houston in February.

A complete copy of the Spring 2015 Edition of the ABA Section of Litigation Health Law Litigation Newsletter can be found at americanbar.org.

• “Attack of the Zombie Property”
• “Electronic Signatures—The Law is Catching Up”
• Employment LawScene™ Alert: “How FMLA Leave Should—and Should Not—Affect Your Employees’ Performance Evaluations”
• Dean Laing Elected as President and Managing Shareholder
• Featured Tax and Wealth Advisor™ Alert: “The Second Sin—”Mistaking Fairly With Equally”
• Publication Watch: Inside Counsel, “Anticipating and Managing Wage and Hour Pitfalls”
• Pleased to Announce:
  • Tim Van de Kamp Elected as Shareholder
  • Attorney Joe Maier, Recognized as a Five Star Professional
  • Super Lawyers List
• Upcoming Events:
  • Join Us for the Fifth Annual MJC 5K Run for Justice at Veteran’s Park
  • Hot Topics for Small Firms and Solo Practitioners

On February 10, 2015, the Wall Street Journal published an article entitled “Everything Is Awesome! Why You Can’t Tell Employees They’re Doing a Bad Job” extolling the virtues of praising employees’ strengths and scaling back on criticism.  Although this may be good for employees’ confidence levels, it is bad for companies when they have to defend a discrimination lawsuit or oppose a bid for unemployment benefits.For example, in September 2011, a New York woman sued in federal court claiming that her employer “mommy-tracked” her by attempting to demote her, refusing to promote her, and cutting her bonus after she took maternity leave, despite repeatedly earning positive performance ratings during her career with the company.  The company argued that she was lawfully terminated because her reviews were done by an “easy grader” and she was not meeting the company’s other metrics.  In January 2015, the federal judge overseeing the case stated that the case looked strong enough to go to trial due in part to the questions of fact presented by the positive performance reviews.

Performance reviews are valuable tools for employers.  While they may be used to boost an employee’s self-esteem and confidence, employers should carefully train their supervisors and manager to give honest feedback and critiques when necessary.  Problems should not be sugar-coated; the issue, the steps to correct the issue, and the consequences for failing to correct the issue need to be included in evaluations and reviews.  These honest assessments on an employee’s performance are essential to being able to discipline and terminate an employee if that becomes necessary, as well as defending the company from a lawsuit or claim for unemployment compensation.

On March 25, 2015, Joseph E. Gumina, who leads the firm’s labor and employment practice, spoke to the Greater Milwaukee Chapter of the Hospitality Financial and Technology Professionals. Attorney Gumina spoke about the latest developments in labor and employment law affecting the hospitality industry, including the latest developments before the NLRB and the EEOC. Attorney Gumina also spoke about wage and hour compliance and workplace harassment issues in the hospitality industry.

On Wednesday, March 25, 2015, a divided U.S. Supreme Court issued a ruling in Young v. UPS.  The Supreme Court was asked to decide whether the Pregnancy Discrimination Act (“PDA”), which amended Title VII of the Civil Rights Act of 1964, allows an employer to have a policy that accommodates some, but not all, workers with non-pregnancy related disabilities but does not accommodate pregnancy-related conditions. We covered the background of the case here.  The majority opinion from the Supreme Court overturned the Fourth Circuit’s decision to affirm summary judgment for the employer and returned the case to the Fourth Circuit.

The employer argued that the PDA Act doesn’t require accommodations or special treatment for pregnant employees and that it was, therefore, entitled to treat pregnant employees the same as it treated employees with restrictions stemming from off-the-job injuries.  The employee argued that  employers who provide work accommodations to non-pregnant employees must do the same for pregnant employees who are similarly restricted in their ability to work.  The majority opinion did not find either the employee or the employer’s interpretation of the PDA persuasive.

The majority opinion rejected the employee’s interpretation of the PDA because it essentially gave pregnant employees an unconditional “most-favored-nations” status because pregnant employees would have to receive the same accommodations that any other employee received for any reason.  The majority agreed with lower courts that this was not Congress’ intent in passing the PDA.  Although the EEOC had supported the employee’s position and published guidelines in line with her arguments, the majority stated that the guidelines were promulgated after certiorari was granted, took a position on which previous EEOC guidance had been silent, were inconsistent with positions long advocated by the government, and the EEOC did not explain the basis for the guidance; therefore, they found such guidance unpersuasive.

The Supreme Court’s majority opinion disagreed with the employer’s interpretation as well, holding that it would cause the first clause of the PDA to be superfluous and would fail to carry out a key objective in passing the PDA.

The majority laid out that a pregnant employee can still use the McDonnel Douglas framework to prove a case of disparate treatment under the PDA by showing that she belongs to a protected class, that she sought an accommodation, that the employer did not accommodate her, and that the employer did accommodate others similar in their ability or inability to work.  The employer may then justify its refusal to accommodate by relying on legitimate, nondiscriminatory reasons, although claims that it is more expensive or less convenient will generally not suffice.  The employee may then show that the alleged legitimate, nondiscriminatory reason is pretextual.  The Supreme Court sent the case back to the Fourth Circuit to determine whether there were genuine issues of material fact as to whether the employer’s reasons for not accommodating her were pretextual.

The majority did make an interesting note that their holding may be of limited significance because of the change in the Americans with Disabilities Act expansion in 2008 and the EEOC’s guidance that employers are required to accommodate employees whose temporary lifting restrictions originate off the job.  Although the Court expressed no view on the statutory or regulatory changes and although pregnancy is generally not considered a disability but conditions related to pregnancy can be, this could cause employees to raise ADA claims when denied accommodations related to their pregnancies and pregnancy-related conditions.

Employers should carefully consider their policies on how to handle employee requests for accommodations.  Although the ruling did not fully side with either party, it is likely to lead to additional litigation on accommodation requests by pregnant employees.

Attorney Peter J. Walsh will be presenting at the SFSP Milwaukee Chapter Membership Meeting and Networking event on Tuesday, March 24, 2015.

Mr. Walsh is a member of the Tax and Succession Planning Practice Group and will be presenting on how insurance products, such as life insurance and long term care insurance, can be used in asset protection planning for long term care.  He first presented this topic to the Elder Law Section of the Wisconsin Bar in September 2013 and his upcoming presentation will be updated to reflect recent changes in the law.

On March 6, 2015, Dean Laing spoke at the 2015 Marquette University Law School Civil Litigation and Evidence Conference for attorneys.  The topic of his presentation was “Deposition Practice,” and included discussion on errata sheets, sequestration, videotape depositions, telephonic depositions and behavior at depositions.  The presenters at the Conference included some of the top trial attorneys in Wisconsin.

Today, Friday, March 6, 2015, the Wisconsin State Assembly after a marathon session passed right-to-work legislation by a vote of 62 to 35. The State Senate had previously approved the right-to-work legislation by a vote of 17 to 15 the previous week. The votes were cast according to party lines.  The fast-tracked bill will be sent to Governor Scott Walker for signature, which could occur as early as Monday.  The bill is aimed at making Wisconsin more attractive to businesses by prohibiting as a condition of employment membership in a labor organization, and, accordingly, provides employees the freedom to choose as to whether they want to pay union dues. Union supporters strongly opposed the bill arguing that the bill harms unions and slows job growth.  However, Republican Assembly Speaker Robin Vos said that in Indiana, which passed a similar bill in 2012, unions have not shrunk and jobs have grown.

Once Governor Walker signs the bill, Wisconsin will become the 25th right-to-work state in the country following recent right-to-work legislation passed in Indiana and Michigan.  The right-to-work legislation will affect only private-sector workers.  The Wisconsin bill would make it a crime punishable by up to nine months in jail to require a worker who is not in a union to pay dues.

Right-to-work is an often misinterpreted concept, as it does not guarantee any right to employment.  Under federal labor law, a union that is elected to represent a bargaining unit must represent all workers, even those who have voted against the union.  In states that do not have right-to-work laws, all employees in the bargaining unit are required to pay their fair share of union dues for that representation, even if they voted against the union and do not wish to pay union dues.  In right-to-work states, however, which Wisconsin will soon be, employees cannot be compelled to pay any union dues or fees in a workplace where an union represents employees through a collective bargaining agreement even though such employees will be covered by the collective bargaining agreement. Wisconsin’s right-to-work legislation also makes it unlawful to require any individual to become or remain a member of an union.

Once Governor Walker signs the bill, the new right-to-work law will apply upon the renewal, modification, or extension of any private sector collective bargaining agreement.  This means that for collective bargaining agreements currently in place as of the time of enactment of the law, employees would still be required to pay their fair share of union dues and remain members of the union for the remaining term of the agreement. However, for any collective bargaining agreement entered into, renewed or modified after enactment of the legislation, any union security clause requiring employees to be members of the union or any requirement for employees to pay union dues would no longer be enforceable.