Employers Get Another Victory Litigating Use of Background Checks in the Hiring Process

Posted by Jeanine Gagliardi on Wed, 05/07/2014 - 04:00

The EEOC’s aggression toward employers that use background checks in the hiring process has resulted in a lot of litigation against businesses. We recently posted about a big win for employers in the federal trial court in Maryland. The EEOC’s appeal of that decision is still pending.

In the meantime, the U.S. Court of Appeals for the Sixth Circuit issued an opinion in another case concerning the same issue. Some experts believe that the new Sixth Circuit opinion foreshadows what will happen in the appeal of the Maryland case.

EEOC Gives Guidance on Religious Dress in the Workplace

Posted by Edward Sharkey on Wed, 04/30/2014 - 04:00

Uniforms and dress codes are an integral part of many companies. Business owners and operators appreciate the consistency, the branding, and the image that uniforms can help create. Can you imagine a UPS deliveryman showing up at your door wearing jeans instead of brown shorts?

Problems may arise, however, when an employee’s religion dictates that they dress or groom themselves in a manner inconsistent with their employer’s uniform or dress code. Small business owners grapple with this dilemma on a constant basis: “When should I allow my employee an exception from the rule, and when may I lawfully enforce my rule over my employee’s religious objection?”

EEOC Guide Fails to Give Constructive Guidance Regarding Use of Background Checks

Posted by Jeanine Gagliardi on Thu, 04/24/2014 - 04:00

We previously cautioned businesses to take care when using background checks in the hiring process. The EEOC, the agency tasked with enforcing federal employment discrimination laws, has been aggressive in suing employers to try to stop what it perceives as discriminatory use of background checks.

Why Can't Google Register "Glass" as a Trademark

Posted by Jeanine Gagliardi on Thu, 04/10/2014 - 04:00

Google’s recent difficulty registering “Glass” as a trademark for its Google Glass product is a good reminder of what to consider when selecting a name. Google Glass is a computer that is wearable like eyeglasses. Google applied to register “Glass,” in a stylized font, as a trademark for the product. The U.S. Patent and Trademark Office rejected the application because, among other reasons, “Glass” is “merely descriptive.”

To serve as a trademark, a name must be distinctive, or capable of identifying the source of a particular good or service. To determine their distinctiveness, names are grouped into four categories based on their relationship with the underlying product or service.

New MD Ruling: Federal Act Ineffectual to Combat Employee Data Theft

Posted by Jeanine Gagliardi on Thu, 04/03/2014 - 04:00

What can an employer do when an employee takes data he is authorized to have for his job and misuses it for another purpose - maybe his own or someone else's business? We previously posted about a split in the law concerning the scope of a federal law intended to combat hackers - the Computer Fraud and Abuse Act (“CFAA”). The CFAA, primarily a criminal statute, also creates a civil cause of action against a person who accesses a computer system without proper authorization.

The split concerns how courts define "unauthorized access." Some courts interpret it to mean hacking into a computer system. Others allow that it includes misusing data from a computer system, even if the offender was technically authorized to access the data. Employers have tried to use the act to combat employees who take and then misuse company trade secrets. A new ruling from the Court of Appeals for the 4th Circuit, which includes Maryland and Virginia, establishes the law in those jurisdictions.

FBI Warns of E-Mail Fraud Specifically Targeting Businesses

Posted by Edward Sharkey on Wed, 03/19/2014 - 04:00

Last month, the Seattle office of the FBI issued a warning about a new e-mail fraud. Three businesses were victimized by the scam. The FBI has taken to calling the new type of fraud the “man-in-the-E-mail,” which derives its name from the criminals’ modus operandi: they intercept e-mails between established business partners and insert themselves into the e-mail chain. How do they do it?

Federal and State Data Breach Laws Every Business Should Know

Posted by Edward Sharkey on Wed, 03/12/2014 - 04:00

Over the past few months, we have devoted a lot of attention to the legal issues businesses face when they experience a data breach. There are two reasons why this topic is becoming an important aspect of business litigation:

An Employee May Be Liable for Stealing Company Data, Even if She Does Not Use It

Posted by Jeanine Gagliardi on Wed, 02/26/2014 - 05:00

One legal tool available in most states for employers to address employee theft of company data is the Uniform Trade Secrets Act (“Act”). Maryland, Virginia, and the District of Columbia are among the jurisdictions that have adopted the Act. The Act creates a cause of action against a person who misappropriates another’s trade secret. Under the Act, a trade secret can be misappropriated in two ways:

(1) improperly acquiring the trade secret, such as by theft, misrepresentation, or espionage; or

(2) disclosing or using the trade secret.

A recent case decided by a federal court in Virginia highlights one reason why employers like the Act.

Is My Contract Damages Clause Enforceable?

Posted by Edward Sharkey on Mon, 02/10/2014 - 05:00

Not necessarily.

Last year, we helped a colleague who is a business law professor compile a list of terms, commonly found in contracts, which simply do not work. Courts do not enforce them in the plain way that they are written. The purpose was to educate future business lawyers about a practical reality of contract law: a lawyer can get an opposing party to agree to a term in a contract, but that does not necessarily mean it will be enforced. This is a challenge for lawyers and clients alike, as it can lead to a failure of expectations - something that is never good for business.

A recent opinion from the Maryland Court of Special Appeals reminds us of this reality. In the case, a business hired a contractor. Their agreement included a covenant not to solicit. If the contractor hired away any of the business's employees, the contractor would be liable to pay the business 150% of the employee's annual salary. The contractor did just that, and litigation ensued.

Retailers Ask for Uniform Regulation Where Data Breaches Are Concerned

Posted by Edward Sharkey on Mon, 01/27/2014 - 05:00

In the wake of massive data breaches at Target retail stores and Nieman Marcus, media are reporting that retailers are begging for increased federal regulation of data breach events. Specifically, they report that corporate America is behind the introduction of new bills in the Senate and House which would create a federal standard requiring immediate notification to consumers whose data has been compromised. Articles are playing the theme that regulation is good for business because businesses are asking for it. While the theme is interesting, it is utterly false.

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