April 29, 2011

St. Jude wins $2.3 billion trade-secret verdict

Posted in Confidential Information, Employee Handbooks, Trade Secrets tagged , , , at 10:13 am by Tom Jacobson

A California jury has awarded Minnesota-based St. Jude Medical $2.3 billion in a trade secrets case brought against a former employee and the company he founded.

According to reports published in the Star Tribune and elsewhere, the former employee, Yongning Zou, was accused of stealing St. Jude’s trade secrets in order to set up a rival medical device company, Nervicon (St. Jude wins $2.3B in trade secrets suit, http://bit.ly/hCyquH; see also St. Jude Wins $2.3B in Trade Secrets Trial, http://bit.ly/imGBnw).   Zou had been a principal hardware design engineer for St. Jude’s cardiac rhythm management division, Pacesetter, Inc.  He had access to company documents and had signed a nondisclosure agreement.

A month after Zou left Pacesetter, Nerivcon asked one of Pacesetter’s manufacturers to make a product which was unique to St. Jude.  Nervicon also gave the manufacturer the St. Jude product specifications and a document that had a “SJM” part number. 

St. Jude accused Zou and Nervicon of stealing its trade secrets.  A California jury agreed and awarded the company $2.3 billion for past damages, future economic loss and punitive damages.

In today’s business world a company’s greatest asset is sometimes the confidential information it and no one else has.  For example, a company’s customer lists, marketing plans, business strategies, formulas, and information of all types can be extremely valuable when it is not known to the public.  It becomes valuable because it is a secret. 

The Minnesota Uniform Trade Secrets Act, http://bit.ly/h5oN6l, is one helpful tool for protecting confidential information.  To take advantage of its protections, employers must, among other things take steps that are reasonable under the circumstances to protect the secrecy of the information.  Confidentiality agreements, computer passwords, limiting access and keeping sensitive information under lock and key are just a few examples of steps an employer can take to maintain that secrecy.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

Advertisements

April 25, 2011

Save the date — 2011 West Central MN Employment Law Update

Posted in Exempt/Non-Exempt Employees, Fair Labor Standards Act, Independent Contractors, Social Media in the Workplace, Training, Uncategorized tagged , at 5:23 pm by Tom Jacobson

The Eighth Annual West Central Minnesota Employment Law Update will be presented at the Alexandria Technical and Community College on Thursday, June 9th from 8:00 a.m. to 4:30 p.m.

In addition to an update on the latest developments in employment law and the annual panel discussion of the featured topics, this year’s seminar will include bonus sessions covering employee relations topics.  Please check out the full seminar agenda and register using the attached 2011 Employment Law Update Flyer.   

Registrations are due by June 2nd.  HRCI credits are pending for the seminar.

I look forward to seeing you on June 9.

April 21, 2011

“May” may mean “may” after all

Posted in Absenteeism, Attendance, Misconduct, Progressive Discipline, Unemployment Benefits tagged , , , , , at 12:13 pm by Tom Jacobson

The Minnesota Supreme Court rarely considers claims for unemployment benefits.  That is because most unemployment claims are resolved at the administrative level or by the Minnesota Court of Appeals.  So, when the Supreme Court decides an unemployment case, it’s worth noting.  The Court did so on April 20, 2011, and the decision relates to my post last June regarding Stagg v. Vintage Place, Inc. (When “may” means “must” in a progressive discipline policy, according to the Minnesota Court of Appeals).

In the Stagg case, an employee was fired because of his attendance problems.  The employer’s policies said that for attendance issues, the employee “may” be subjected to progressive discipline.  When it considered the case, the Court of Appeals ruled that despite the word “may” in the policy, the employer could not skip steps.  The appellate court reasoned that the employer’s only discretion was whether to discipline at all, and once the employer decided to discipline for the attendance problem, the employer had to follow each progressive step.  Because Stagg’s employer skipped a step and fired the employee, the court ruled that the employee’s absenteeism was not employment misconduct.

The Minnesota Supreme Court has now reversed the Court of Appeals (see Stagg v. Vintage Place, Inc., http://1.usa.gov/eJF7gk).  The Supreme Court held that when the issue in an unemployment benefits case is employee misconduct, the focus is on the employee’s conduct, not on the employer’s progressive discipline policies.  Specifically, the court stated, “[W]hether an employer follows the procedures in its employee manual says nothing about whether the employee has violated the employer’s standards of behavior. Put another way, an employee’s expectation that the employer will follow its disciplinary procedures has no bearing on whether the employee’s conduct violated the standards the employer has a reasonable right to expect or whether any such violation is serious.”  Because this employer’s attendance policies were clearly stated and communicated to the employee, the court said the employee’s violations were misconduct even though the employer skipped a step in its process.

However, the Supreme Court stopped short of interpreting “may” in this employer’s progressive discipline policy.  The court said that whether or not that language created a contract and whether such a contract was breached would be relevant in a breach of contract case brought by the employee against the employer, but they are not the standard for deciding “misconduct” for the purposes of deciding eligibility for unemployment benefits.

While the Supreme Court’s decision helps employers by clarifying the standard for determining “misconduct” in unemployment benefits cases, the meaning of “may” in a policy such as the one in the Staggcase remains unclear.  Thus, if an at-will employer wishes to retain as much flexibility as possible in its discipline policy, the policy should be written in a way that retains the employer’s discretion over not only when to discipline, but also over how to discipline.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

April 13, 2011

Smokin’ in the boys’ room

Posted in Minnesota Lawful Consumable Products Act, Smoking, Smoking tagged , , at 8:27 am by Tom Jacobson

If you’ve ever listened to a “classic rock” radio station, odds are that you’ve heard  Brownsville Station or Motley Crue bash the establishment with Smokin’ in the Boys’ Room.  In case it’s been awhile, check it out again on YouTube at http://bit.ly/91Lz8.  (How about the jumpsuit they must have borrowed from Elvis?)

I thought of the song after reading a recent article about employers who are adopting expansive workplace smoking policies, Smokers Need Not Apply:  Good Idea or Illegal, http://bit.ly/dYuux7.  For Minnesota employers, banning smoking in the boys’ room (and, throughout nearly all indoor workspaces) is not only a good idea – it’s the law, as required by the Minnesota Clean Indoor Air Act, http://bit.ly/dLp1Ze.

But prohibiting smokers from applying for work would run afoul of Minnesota’s Lawful Consumable Products Act, http://bit.ly/fyiKcT.  This law states that employers may not refuse to hire a job applicant or discipline or discharge an employee because the applicant or employee engages in or has engaged in the use or enjoyment of lawful consumable products, if the use or enjoyment takes place off the premises of the employer during non working hours.  The law specifically includes tobacco within the definition of “lawful consumable products.”  So smokers still have right to apply for work, even though “Everybody knows that smoking ain’t allowed in school” and must be banned in most Minnesota workplaces.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

April 5, 2011

Seagate’s liability to duped recruit jumps to $2.4 million

Posted in Application Process, Attorney's Fees, Fraud and Misrepresentation, Hiring and Recruiting, Job Descriptions, Minnesota Statute 181.64, Minnesota Statute 181.65 tagged , , , , at 7:42 pm by Tom Jacobson

Last December, I posted an article about how Minnesota’s Seagate Technologies was socked with a $1.9 million jury verdict for misrepresenting a job to a recruit the company hired (see Bloomington-based Seagate hit with $1.9M verdict for misrepresenting job to recruit).  Not surprisingly, lawyers for both sides filed post-trial motions after the verdict was delivered.  Seagate recently lost both motions, and one of them added over a half million dollars to the recruit’s judgment.

In the first post-trial motion, Seagate challenged the outcome of the trial.  Seagate argued that the evidence was not sufficient to support the jury’s verdict and that the company should get a new trial.  In the alternative, Seagate argued that the verdict was excessive and should be reduced.  The federal district court judge who presided over the case, the Hon. Donovan Frank, rejected all of Seagate’s arguments and allowed the verdict to stand (Vaidyanathan v. Seagate US, LLC, http://bit.ly/hMptiM).

At the same time, Vaidyanathan asked the court to award him the attorney’s fees he incurred while litigating against Seagate.  Vaidyanathan’s argument was based on a seldom-used Minnesota statute, Section 181.65 (http://bit.ly/foPuhF), which allows the recovery of fees in cases such as his.  After considering the issues in the case, the amount of time spent by Vaidyanathan’s attorneys on the case (nearly 2050 hours), and the rates charged by his attorneys (ranging from $50.00 per hour for a law clerk to $495.00 per hour for the lead attorney), Judge Frank awarded Vaidyanathan an additional $517,352.50 for his attorney’s fees (see Vaidyanathan v. Seagate US, LLC, http://bit.ly/dS6K9t).  This brings Seagate’s liability to Vaidyanathan to more than $2.4 million.  If Seagate’s own attorney’s fees were roughly the same as Vaidyanathan’s, the company’s overall cost in this case could be approaching $3.0 million.

The case emphasizes the high cost of employment-related litigation, for there are many laws which allow successful employee-plaintiffs to recover their attorney’s fees in addition to their other damages.  Depending on the legal basis for an employee’s claims, those damages can include lost past and future wages and a myriad of other items.  And, employers are rarely awarded their attorney’s fees when they win.  To minimize the risk of getting involved in such high-stakes litigation, employers should regularly consult with legal counsel regarding their employment practices.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

%d bloggers like this: