To view the accompanying webinar, go to: https://www.financialpoise.com/financialpoisewebinars/view-webinar/?id=261915068&slides=8FFUUS9Gyz9IpR
You only get one chance to make a first impression, so you want to make sure you’re your company avoids unnecessary missteps when recruiting and hiring employees. Understanding what you can and cannot say during interviews and how to respond when a candidate volunteers information that may be considered “off limits” is essential. At the same time, there are a host of laws being passed throughout the country that address when and what sort of information you can request from applicants regarding their criminal and financial histories. In the event you decide to protect your organization by requiring certain employees to sign some type of restrictive covenants—non-competition, non-solicitation and/or non-disclosure—there are a host of legal and practical issues to consider. This webinar explores these and other issues so that you can be confident, going forward, that you are starting off on the right foot—legally, at least—when you hire new employees.
2. Practical and entertaining education for
attorneys, accountants, business owners
and executives, and investors.
2
3. The material in this webinar is for informational purposes only. It
should not be considered legal, financial or other professional
advice. You should consult with an attorney or other appropriate
professional to determine what may be best for your individual
needs. While Financial Poise™ takes reasonable steps to ensure
that information it publishes is accurate, Financial Poise™ makes
no guaranty in this regard.
DISCLAIMER
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4. MEET THE FACULTY
MODERATOR:
Aaron Gelb Conn Maciel Carey LLP
PANELISTS:
Jennifer Marszalek Havas Chicago Village/Havas
David N. Michael Gould & Ratner
Allison L. Feldstein Saul Ewing Arnstein & Lehr LLP
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5. ABOUT THIS WEBINAR
You only get one chance to make a first impression, so you want to make sure you’re your company avoids
unnecessary missteps when recruiting and hiring employees. Understanding what you can and cannot say during
interviews and how to respond when a candidate volunteers information that may be considered “off limits” is
essential. At the same time, there are a host of laws being passed throughout the country that address when and
what sort of information you can request from applicants regarding their criminal and financial histories. In the
event you decide to protect your organization by requiring certain employees to sign some type of restrictive
covenants—non-competition, non-solicitation and/or non-disclosure—there are a host of legal and practical issues to
consider. This webinar explores these and other issues so that you can be confident, going forward, that you are
starting off on the right foot—legally, at least—when you hire new employees.
This webinar is delivered in Plain English, understandable to you even if you do not have a background in the
subject. It brings you into an engaging, even sometimes humorous, conversation designed to entertain as it teaches.
And, it is specifically designed to be viewed as a stand-alone webinar, meaning that you do not have to view the
other webinars in the series to get a lot out of it.
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6. ABOUT THIS SERIES
If you have employees or advise companies with employees, this webinar series is for you! No employer—whether
large, medium or small—is immune from the reach of federal, state and/or local employment laws and regulations.
Now, more than ever, employers should consider taking a proactive approach to auditing their employment practices
and policies so that they can better respond when issues arise. This webinar series approaches the employer-
employee relationship from beginning to end, with programs covering the most important steps along the way,
including hiring and onboarding, policy and procedure development and training, wage and hour compliance,
accommodating disabled employees, conducting investigations and considerations associated with ending the
relationship.
As with every Financial Poise Webinar, each episode is delivered in Plain English understandable to investors,
business owners, and executives without much background in these areas, yet is also valuable to attorneys,
accountants, and other seasoned professionals. And, as with every Financial Poise Webinar, each episode brings you
into engaging, sometimes humorous, conversations designed to entertain as it teaches. Each episode in the series is
designed to be viewed independently of the other episodes, so that participants will enhance their knowledge of this
area whether they attend one, some, or all episodes.
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7. Dates shown are premiere dates; all episodes will be available on demand after
their premiere date.
EPISODES IN THIS SERIES
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EPISODE #1 Welcome to the Team! Recruiting and Hiring, Including Restrictive Covenants
EPISODE #2 An Ounce of Prevention: Policies, Procedures and Proactivity
EPISODE #3 Show Them the Money: Wage & Hour Compliance
EPISODE #4 Time for a Break: Managing Leaves of Absence and Accommodating Disabilities
EPISODE #5 I Know What You Did Last Summer: Workplace Investigations
EPISODE #6 It’s So Hard To Say Goodbye: Minimizing Risk When Terminating Employees
8. Episode #1 – Welcome to the Team! Recruiting and
Hiring, Including Restrictive Covenants
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9. Risks in Hiring and Interview Process
Aspects of recruiting that could trigger discrimination claim:
• Advertising and describing job vacancies
• Conducting interviews
• Making an offer of employment
• Rejecting an applicant
• Setting compensation
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10. Risks in Hiring and Interview Process
Ways to minimize risks of discrimination claim:
• Determine applicable federal, state and local laws and the protected classes
covered by each
• Ensure that individuals in recruitment process are trained to identify and
avoid potential discriminatory practices
• Identify the essential qualifications and functions of each position
• Focus on objective criteria in the interview and selection process
10
11. Social Media Issues in Hiring
• Law in this area is still developing
• You do not want to learn info about applicant’s race, religious beliefs,
genetic conditions, sexual orientation, age, national origin
• Can minimize potential liability by either:
– Not conducting social media searches at all; or
– Using someone other than the interviewer to conduct social media
screening, and ensure that person only passes lawful info to the
interviewer
• Trend in state law is to prohibit asking candidate for access to their social
media accounts
11
12. Identify Essential Functions of Position
• Create/review position description
• Document detailed tasks to be performed outside of PD
• Identify most important competencies/tasks for the position
• Realistically evaluate/document physical requirements
• Use this information in developing various materials
– Job posting and behavioral interview questions
12
13. Internal Posting Considerations
• Ensure ALL openings are posted
• Ensure ALL employees are made aware of openings
• Ensure ALL interested employees have opportunity to apply
• Risks associated with employee referrals
• What happens if you depart from standard practices?
13
14. Employment Applications
• Certification of accuracy with signature block can be used effectively in
subsequent proceedings if applicant misrepresented information
• Asking about reasons for leaving prior positions or whether individual was
involuntarily separated may also yield valuable information
• If sourcing applicants in multiple jurisdictions, tread carefully regarding
criminal background inquiries
• Similarly, questions about past salary history are prohibited/limited in
certain jurisdictions
• You may inquire about immigration status on the application but be careful
because overly broad questions can lead to discrimination claims
14
15. Criminal Background Inquiries in Illinois
• Job Opportunities For Qualified Applicants Act
• 15 or more employees
• Criminal background inquiries not permitted on application
• Employers exempted:
• Those required by federal or state law to exclude applicants with specific
types of convictions
• Those that require a standard fidelity or equivalent bond where one or
more specific criminal convictions would disqualify the applicant
• Those that employ individuals licensed under Illinois' Emergency
Medical Services (EMS) Systems Act.
15
16. Criminal Background Inquiries in Illinois
• Employers may notify applicants in writing of the "specific offenses that will
disqualify an applicant from employment in a particular position due to
federal or State law or the employer's policy."
• A blanket statement that all criminal convictions disqualify an applicant
would violate the Act.
• Employers may inquire into an applicant's criminal background once he or
she has been deemed qualified for a specific position and selected for an
interview
• If the employer is not conducting interviews, it may inquire only after
making a conditional offer of employment.
16
17. Credit Inquiries in Illinois
• Employee Credit Privacy Act
• Employer may not use credit history or credit report in decisions relating to
recruitment, hiring, compensation, discharge or a “term, condition, or
privilege of employment.”
• Employer may not ask about an applicant’s or employee’s credit history or
obtain a credit report from a consumer reporting agency.
• Employer may inquire if “a satisfactory credit history is an established bona
fide occupational requirement of a particular position or a particular group
of an employer’s employees.
• Act does not affect an employer’s ability to conduct a thorough background
investigation that does not contain a credit history or report, as permitted
under the Fair Credit Reporting Act
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18. Background Checks
• Best way to assess information about job applicants
• May learn about an applicant’s job history, credit history or personal
character
• Decide whether you will call references
• Potential legal exposure if do not
• May conduct internally or use a third party provider, known as a Consumer
Reporting Agency.
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19. Background Checks (Cont)
• FRCA applies to the use of third-party service providers to obtain
background information on applicants.
• Before obtaining a consumer report from a CRA, an employer must:
• Notify the applicant in writing that it will obtain a consumer report
• Obtain the applicant’s written consent
• Certify to the consumer reporting agency that they have complied with
FCRA
• Meet additional requirements, including personal interviews
• FRCA does not apply to employers conducting background checks on their
own
• But in-house background checks may be regulated by state law
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20. Background Checks (Cont)
• Beware “click wrap” acknowledgments.
• Notice must be in writing and in a stand-alone format.
• Notice cannot be in an employment application.
• Employer may can include some minor additional information in the
notice, like a brief description of the nature of consumer reports, but only if
it does not confuse or detract from the notice.
• If you want the authorization to allow you to get consumer reports
throughout the person's employment, make sure you say so clearly and
conspicuously.
20
21. Background Checks (Cont)
• Before You Take Adverse Action (reject applicant, terminate, etc.)
• Provide individual with a notice that includes a copy of the report you
relied on; and
• a copy of A Summary of Your Rights Under the Fair Credit Reporting
Act.
21
22. Background Checks (Cont)
After You Take Adverse Action:
• Give a notice of that fact – orally, in writing, or electronically.
• The notice must include:
• the name, address, and phone number of the consumer reporting
company that supplied the report;
• a statement that the company that supplied the report did not make
the decision to take the unfavorable action and can't give specific
reasons for it; and
• a notice of the person's right to dispute the accuracy or completeness
of any information the consumer reporting company furnished, and to
get an additional free report from the company if the person asks for it
within 60 days.
22
23. Screening Processes
• Determine what qualifications are required to progress to each step
• Do not allow those without to advance beyond
• Consider use of third party provider
• Consider having someone other than hiring manager to pre-screen
• Document steps and reasons
23
24. Wage and Hour Law
• Comply with minimum wage and OT laws!!
• Make sure you know FLSA/state law basics
• Current Federal Minimum Wage is $7.25/hr. (unchanged since July 2009)
• Chicago: $12 effective July 1, 2018 $13 effective July 1, 2018
• Non-exempt employees must receive an overtime premium of 1 ½ x their
regular rate of pay for all hours worked in excess of 40 in any workweek
24
25. Employee Classification:
Employee or Contractor?
• Classify workers correctly to avoid potential lawsuits and penalties by the
DOL
• It may appear that using independent contractors saves costs.
• This is not the case if the worker is actually an employee.
• Assuming the worker is working solely or primarily for your company, the
worker is, in all likelihood, an employee.
• Economic realities & degree of control
25
26. Employee Classification:
Exempt vs. Non-Exempt
• Appears to “save” costs is by treating most employees as exempt from the
FLSA.
• No overtime, no uncertainty.
• But huge misclassification risk.
• Job titles do not determine exempt status; the only thing that can determine
an employees’ status are duties and responsibilities.
• Assume all workers are non-exempt
• Entitled to overtime pay for over 40 hours worked
• Higher level employees may be exempt if certain criteria are met
26
27. Exemption Types
• Executive
• Administrative
• Professional
• Outside Sales
• Commissioned Employees
• Certain Computer-Related Workers
27
28. Restrictive Covenants
• Types of covenants
• Non-compete
• Non-disclosures
• Non-solicit
• What do you need to protect
• What do you need to offer
• Employment is not enough
• 2 year rule
• Options
28
29. Protecting Trade Secrets
• Information not generally known to others that gives an employer a
competitive advantage
• Confidential information
• Information has economic value
• Subject of reasonable efforts to maintain its secrecy
• Generally defined by state law – a large majority of states have adopted the
Uniform Trade Secret Act
29
30. Protecting Trade Secrets (Cont)
• Fact-specific inquiry
• Factors courts consider include
• Whether the information is known outside of the owner’s business
• Measures taken by the owner to guard the secrecy of the information
• The value of the information to the owner and to the competitor
• The amount of effort or money expended by the owner in developing the
information
• The ease or difficulty with which the information could properly be
acquired or duplicated by others
30
31. Protecting Trade Secrets (Cont)
• Tell employees what information is confidential and require signed
employment agreements
• Duty to Maintain Confidentiality
• Restrictions on Solicitations of Customers
• Restrictions on Solicitations of Employees
• Duty to Return Confidential and Proprietary Information
• Safeguard computer-based information
• Password protections
• Anti-deletion programs
• Mark information confidential (hard copy and electronic)
31
32. Confidentiality, Non-Disclosure Agreements
• Whether a non-disclosure agreement (NDA) is enforceable rests on the
somewhat vague notion of “reasonableness.”
• The scope of NDAs varies by state
• However, courts typically look at several factors when determining whether
or not an NDA is reasonable, including:
• Interests of the disclosing party in keeping the information secret
• Period of time the information must be kept secret
• Burden of compliance on the receiving party
• Interests of the public
• Also, the information that an employer is seeking to protect must actually
be confidential
32
33. Non-Compete Agreements
• Require employees to enter into a non-competition agreement before
beginning work
• Agreement does not take effect until after the employee-employer
relationship has ended
• Generally, in order to be considered valid, a non-competition agreement
must:
• Be supported by consideration at the time it is signed;
• Protect a legitimate business interest of the employer; and
• Be reasonable in scope, geography, and time
33
34. Non-Compete Agreements (Cont)
• Some states do not permit non-competition agreements at all
• Examples: Oklahoma, North Dakota and California
• Most courts disfavor non-compete agreements – but they are not prohibited
• restraint on trade interferes with competition and impairs the availability
of services and the ability of workers to follow personal interests
• courts will still scrutinize non-compete agreements closely
• important to have a reasonable non-compete agreement that is narrowly
tailored
34
35. Non-Compete Agreements (Cont)
• Regardless of how well a non-compete agreement is written, no court will
enforce it unless the employer can identify a legitimate business interest that
the restrictive covenant seeks to protect
• Case law has expanded upon the meaning of legitimate business interest but
this also varies by jurisdiction
• Typically, court’s will apply a totality of the circumstances review to
determine whether the employer has identified a protected business interest
35
36. Hiring Employees with Restrictive Covenants
• KEY Take Reasonable Steps to Protect your Business from Interfering
With Competitors’ Restrictive Covenants.
• Interview Stage
• When considering a new hire, ask during the interview whether the
individual is subject to any employment agreement
• Obtain copies of the employment agreement pre-hire
• Inform the applicant that Company insists on full compliance with
employment agreements
• Company does not want applicant to disclose or use any of the
competitor’s confidential or proprietary data
• Hire Stage: Confirm in offer letter that Company expects employees to
comply with former employer’s agreements.
36
37. Making An Offer
• Confirm at will status, if applicable
• Issues to address in offer letter
• Salary
• Benefits
• Relocation/Sign-on Bonus
• Employment for a definite term – define cause to terminate
• Do not forbid salary discussions
37
38. Delivering Bad News
• Nobody likes rejection
• Importance of closure
• Do you owe them an explanation?
• What should you say?
• What should you not say?
38
39. ABOUT THE FACULTY
Allison Feldstein
Allison.Feldstein@saul.com
Allison L. Feldstein has represented management in employment-related and traditional labor matters for 20
years. She regularly defends employers before administrative agencies and state and federal courts in claims
involving employment discrimination, retaliation, retaliatory discharge, harassment, the Family and Medical
Leave Act (FMLA), the Americans with Disabilities Act (ADA), state and federal wage and hour laws
(including FLSA collective actions), and restrictive covenants. Allison also regularly represents management in
traditional labor matters, including representation and unfair labor practice cases before the National Labor
Relations Board; negotiates collective bargaining agreements; provides counseling during strike and picketing
activity; and represents employers in grievance arbitration. Allison also works proactively with clients to avoid
litigation, providing counseling regarding employee discipline and termination decisions, accommodation
requests, harassment investigations, workplace violence, wage and hour issues, leaves of absence, reductions
in force, restrictive covenants, and union representation and strike and picketing activity. Allison has written
and presented extensively on a variety of labor and employment issues.
39
40. ABOUT THE FACULTY
Aaron Gelb
agelb@connmaciel.com
Aaron R. Gelb is a partner in the Chicago office of Conn Maciel Carey, a boutique law firm focused on
Labor & Employment, Workplace Safety, and Litigation. Mr. Gelb specializes in labor and
employment, and OSHA litigation. He has extensive experience litigating equal employment
opportunity matters in federal and state courts having tried a number of cases to verdict and defending
employers before the EEOC as well as fair employment agencies across the country; in the past 5 years
alone, Aaron has successfully handled more than 250 discrimination charges. Aaron also has a
particular emphasis on advising and representing clients in relation to inspections, investigations, and
enforcement actions involving federal OSHA and state OSH programs, and managing a full range of
litigation against OSHA. Mr. Gelb received his bachelor’s degree from the University of Chicago in
1992 and his JD from the University of Texas in 1995.
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41. ABOUT THE FACULTY
Jennifer Marszalek
Jen.mars@havas.com
Jennifer leads the Talent Team at Havas’ Chicago Village consisting of Talent Acquisition, Talent
Management, HRBPs and employee culture. A strategic human resource business partner with
deep experience in high growth tech, advertising and retail environments, Jennifer works with
leaders to help shape organizational culture and scale their workforce to drive business growth.
Prior to joining Havas in 2016, Jennifer lead the People Team (encompassing all of HR) at
Grubhub and was the head of human resources at SurePayroll, a subsidiary of Paychex.
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42. ABOUT THE FACULTY
David N. Michael
DMichael@gouldratner.com
David Michael is a partner at Gould & Ratner LLP where he serves as the Chair of the firm's Human
Resources and Employment Law Practice. David draws upon an extensive 28-year background in human
resources management and counseling and limits his practice to management-side human resources,
employment and labor law. David helps employers solve their complex employee problems, the issues
that often leave companies wondering, what should we do? He works closely with employers by
providing proactive advice on a wide variety of employment-related topics, representing employers in
employment-related litigation and agency charges, and helping employers draft employment and
restrictive covenant agreements, compensation and bonus policies and employee handbooks. David has
an AV Preeminent rating by Martindale Hubbell and is recognized as both an Illinois Leading Lawyer
and Illinois Super Lawyer in the area of Employment Law: Management.
42
43. The material in this presentation is for general educational
purposes only.
It has been prepared primarily for attorneys and accountants for
use in the pursuit of their continuing legal education and continuing
professional education.
IMPORTANT NOTES
43
44. If you have any questions about this webinar that you did
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webinar on demand, please don’t hesitate to email us at:
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and we will provide a response to your question.
QUESTIONS OR COMMENTS?
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46. About Financial Poise™
www.financialpoise.com
DailyDAC LLC, d/b/a Financial Poise™ provides continuing education to
attorneys, accountants, business owners and executives, and investors. Its
websites, webinars, and books provide Plain English, entertaining,
explanations about legal, financial, and other subjects of interest to these
audiences.
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