Welcome to the Team! Recruiting and Hiring, Including Restrictive Covenants (Series: HR, Talent Management & Employment Law Boot Camp)

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Practical and entertaining education for
attorneys, accountants, business owners
and executives, and investors.
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DISCLAIMER
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 the information
it publishes is accurate, Financial Poise™ makes no guaranty in this regard.
About this PowerPoint: if you are looking at this PowerPoint without the benefit of
listening to the conversation that surrounded it then you are doing yourself a disservice.
This PowerPoint was prepared in contemplation of being viewed in conjunction with
listening to a one hour webinar on the topic
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MEET THE FACULTY
Moderator:
Charles Krugel – Law Offices of Charles Krugel
Panelists:
Jason Klimpl – Tannenbaum Helpern Syracuse & Hirschtritt LLP
Ruth Rauls – Saul Ewing Arstein & Lehr LLP
Matthew Schiff – Sugar, Felsenthal, Grais & Hammer LLP
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ABOUT THIS WEBINAR:
Welcome to the Team! Recruiting and Hiring,
Including Restrictive Covenants
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.
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ABOUT THIS SERIES:
Title of HR, Talent Management & Employment
Law Boot Camp
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.
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EPISODES IN THIS SERIES
4/3/19 Episode #1:
Welcome to the Team! Recruiting and Hiring, Including Restrictive Covenants
5/8/19 Episode #2:
An Ounce of Prevention: Policies, Procedures and Proactivity
6/5/19 Episode #3:
Show Them the Money: Wage & Hour Compliance
7/10/19 Episode #4:
Time for a Break: Managing Leaves of Absence and Accommodating Disabilities
8/7/19 Episode #5:
Know What You Did Last Summer: Workplace Investigations
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Dates shown are premiere dates.
All webinars will be available
On Demand approximately 4 weeks
after they premiere.

Episode #1:
Welcome to the Team! Recruiting and
Hiring, Including Restrictive Covenants
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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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RISKS IN HIRING AND INTERVIEW
PROCESS (cont’d)
• 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
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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
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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
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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?
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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
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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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BACKGROUND CHECKS (cont’d)
• 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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• 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.
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• 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.
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• After You Take Adverse Action:
✓ Give a notice of that fact – orally, in writing, or electronically.
✓ The notice must include:
o the name, address, and phone number of the consumer reporting company that
supplied the report;
o 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
o 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.
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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
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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
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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
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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
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EXEMPTION TYPES
• Executive
• Administrative
• Professional
• Outside Sales
• Commissioned Employees
• Certain Computer-Related Workers
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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
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PROTECTING TRADE SECRETS (cont’d)
• 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
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PROTECTING TRADE SECRETS (cont’d)
• 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)
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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
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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
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NON-COMPETE AGREEMENTS (cont’d)
• 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
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NON-COMPETE AGREEMENTS (cont’d)
• 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
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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.
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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
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DELIVERING BAD NEWS
• Nobody likes rejection
• Importance of closure
• Do you owe them an explanation?
• What should you say?
• What should you not say?
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ABOUT THE FACULTY
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Charles Krugel – cak1@charlesakrugel.com
As a management side labor & employment attorney & human resources (HR) counselor,
Charles Krugel, www.charlesakrugel.com, has 24 years of experience in the field & has been
running his own practice for 18 years. His clients are small to medium sized companies in a
variety of industries. Charles has been lead negotiator for hundreds of labor & employment
agreements & contracts. Additionally, he’s litigated dozens of court cases, administrative
proceedings & arbitrations. In addition to providing traditional labor & employment law
services, he represents companies desiring to institute preventive & proactive HR
functions. These functions include policies & procedures, which help to efficiently &
discreetly resolve issues in-house & prevent lawsuits & complaints; they also help to reduce
costs & act as catalysts for increasing productivity & profits. Moreover, he’s frequently the
subject labor & employment law related TV, radio & print interviews.
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Jason Klimpl – klimpl@thsh.com
Jason B. Klimpl is a partner in the Employment Law Group of Tannenbaum Helpern Syracuse &
Hirschtritt LLP. In this capacity, he advises clients on a broad range of employment law matters, such as
wage and hour compliance; healthcare; equal opportunity actions and policies; employment agreements
and restrictive covenants; independent contractor and consulting issues, reductions in force; technology
and privacy concerns; and other human resources counseling.
Jason is also the Associate General Counsel of the New York Staffing Association, and is heavily involved
in legal and legislative efforts to support the staffing industry. Jason has written numerous employment
law articles and is a contributing faculty member of both Lawline and the National Academy of
Continuing Legal Education. Jason is also a member of the Manhattan Chamber of Commerce’s Speakers
Bureau and Help Desk. Awarded Martindale‐Hubbell “Preeminent” peer review rating. Named 2013
‐2017 New York Super Lawyer (Rising Star). Finally, the New York Enterprise Report named Jason the
winner of the 2012 Best Attorneys and Accountants “Rising Star Attorney” category.
Follow Jason on Twitter: @HR_Attorney
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Ruth Rauls – ruth.rauls@saul.com
Ruth concentrates her practice on complex commercial litigation, employment litigation,
real estate litigation and litigation involving closely-held corporations. She has extensive
experience litigating matters at the trial and appellate levels in state and federal court in
New Jersey and New York, as well as in private mediations and arbitrations. She has
litigated claims arising under the New Jersey Consumer Fraud Act, the New Jersey Law
Against Discrimination, and various other federal and state statutory and common law
causes of action.
To read more about Ruth, please visit: https://www.saul.com/attorneys/ruth-rauls
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Matthew Schiff – mschiff@sfgh.com
Matthew B. Schiff leads the Labor & Employment group at Sugar, Felsenthal, Grais &
Hammer LLP. Matt represents management and executives in disputes claiming
discrimination retaliation, harassment, and employment torts. He counsels clients in
all aspects of employment and labor relations.
Matt is an experienced litigator who has tried or arbitrated a wide range of cases and
argued numerous appeals. He counsels and litigates on wage and hour disputes, trade
secrets, confidentiality, non-compete and non-solicitation agreements.
Matt assists his clients in developing employee handbooks, policies, employment
contracts and separation agreements. He negotiates collective bargaining agreements
and helps his unionized clients with contract administration.

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IMPORTANT NOTE: 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.
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Welcome to the Team! Recruiting and Hiring, Including Restrictive Covenants (Series: HR, Talent Management & Employment Law Boot Camp)

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