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Presents a first approach to the broad and complex controls under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and other statutes regulating employee wages and hours.
A senior sales employee of American Airlines who departed for Delta Airlines with confidential sales and competitive information in tow would not be barred from working for his new employer, as a federal district court in New York denied American's motion for a preliminary injunction ordering the defendant to cease working for the competitor (American Airlines v Imhof, SDNY, 157 LC ¶60,815).
The executive emailed work-related documents to his home email account in preparation to resign his job at American. He also copied documents from his company laptop to his home computer and transferred contacts from his American-issued Blackberry to his own device. American argued the defendant would eventually convey this information to his new employer were he not enjoined from doing so. However, since the defendant agreed to destroy or return the confidential materials to American, and Delta expressly stated it would not accept the information if offered, American could not establish a likelihood of irreparable harm based on intentional wrongdoing.
American next resorted to the inevitable disclosure doctrine, asserting the defendant had confidential information in his head that he would be unable to avoid using if he were permitted to work for Delta. While the court conceded it was unlikely that he left the company "with his mind a tabula rasa," the balance of hardships weighed in favor of the defendant, the court found, unconvinced of the value to American of the confidential information at issue and cognizant that the defendant would be out of a job.
Moreover, the court noted, to grant an injunction based on inevitable disclosure would in effect bind the employee to a restrictive covenant to which he never agreed. "If American were as deeply concerned about the risk of [the defendant] going to work for a competitor as it now professes... It could have offered [him] an employment contract containing a reasonable covenant against post-employment competition," the court wrote. It rejected American's effort "to obtain the substantial equivalent by judicial decree without paying for it and to do so on the basis of vague claims of trade secrets and confidential information."
For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.
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