Pittsburgh Business Litigation Attorneys

Defending Claims

If your business has been sued, the assistance of experienced legal counsel will be invaluable in ensuring your interests are protected. A judgment against your business can not only drain your financial resources, it can also negatively impact your professional reputation. At Kraemer, Manes & Associates, our attorneys handle a wide variety of business litigation issues and are capable of providing your small business with the professional, aggressive representation you need to get back on track after a legal dispute arises.

Small business employment disputes can arise in a variety of contexts. Below are some of the most common legal issues a small employer might face.

Discrimination

As most employers are aware, there are a number of state and federal laws that prohibit discrimination in the workplace, including:

• The Americans with Disabilities Act (“ADA”);
• The Age Discrimination in Employment Act (“ADEA”);
• Title VII of the Civil Rights Act of 1964 (“Title VII”);
• The Pennsylvania Human Relations Act (“PHRA”); and
• The Uniformed Services Employment and Reemployment Rights Act (“USERRA”)

These laws protect against both intentional and unintentional discriminatory employment actions. Even if an employee cannot prove that an employer intended to discriminate against a protected class of individuals, he or she may be able to make out a claim based on disparate impact. Such claims require an employee to show that an employment practice at his or her place of work has a discriminatory effect on a protected class that is not justified by the needs of the business.

Pittsburgh Business Litigation – Prevention

The best way to avoid claims of discrimination is to implement practices that ensure such conduct does not take place to begin with. Below are some of the most effective ways of preventing workplace discrimination.

• Policies and Procedures. The more well-informed employees are about their rights, the less likely they are to raise disputes. A detailed employee handbook or informational materials that specifically lay out prohibited conduct can communicate company policies, prevent miscommunication, and assist employers in making sure supervisors, managers, and other employees are complying with procedures.
• Performance Management Documentation. Discrimination claims are often decided at least in part on evidence of the employee’s past performance with the employer.  Detailed employee performance documentation can help you form a defense against any claims that you took an adverse employment action against a particular employee on the basis of their status as a member of a protected class. Such documentation should include a job description for each employee that lays out expectations and objectives, annual goal-setting documentation, performance evaluations with both employer and employee input, and documentation of any warnings or disciplinary actions taken against the employee.
• Training. Frequent training ensures that supervisors, managers, and employees remain aware of company policies and procedures, including the proper protocol for filing complaints should they find that any company procedures have been violated.

Pittsburgh Business Litigation – Defenses

Even when preventative measures have been taken, sometimes conflict is inevitable. Below are some of the most common defenses employers raise when faced with a claim of discrimination.

• Reasonable Care. With many claims of discrimination, courts allow an employer to defend itself through evidence that it took reasonable care to correct and prevent future improper behavior, and the employee still failed to take advantage of opportunities to remedy the situation.
• The After-Acquired Evidence Defense. After-acquired evidence of plaintiff-employee’s workplace misconduct can mitigate any potential damages he or she might receive (neither reinstatement nor front-pay is an appropriate remedy). To use after-acquired evidence as a defense, the employer must show that it would have terminated the employee solely on those grounds had the misconduct come to the employer’s attention at the time the adverse action was taken. This defense is commonly used in employment discrimination claims. This defense is NOT usable to prove that termination of an employee was reasonable, since the employer didn’t know of the misconduct until after the adverse action had already been taken.
• The Bona Fide Occupational Qualification Defense (“BFOQ defense”). An employer can defend against liability for unlawful discrimination in limited circumstances where “religion, sex, or national origin [or any other protected trait or characteristic] is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise.” This defense is construed very narrowly, and will only be successful when an employer can prove that the aspects of the job that arguably require discrimination fall within the essence of the business, and that there is no way to reasonably arrange job responsibilities to prevent the exclusion of members of a protected class.
• The Business Necessity Defense. For discrimination claims based on disparate impact, an employer can avoid liability by showing that the contested business practice is reasonably and sufficiently related to the position in question and is consistent with business necessity. To succeed using a business necessity defense, the employer must also show that there are no other reasonable alternatives to the current practice that would result in less of a disparity in treatment.

Wrongful Termination

Pennsylvania is an at-will employment state, which means that an employer can fire an employee for any reason or no reason, so long as the termination is not specifically prohibited by law. Terminations that are prohibited by law include those that are specifically mentioned in a state or federal statute (such as the discrimination statutes mentioned above), or terminations that are against the public policy of Pennsylvania.

Harassment and Hostile Work Environment

There is a lot of misconception among employers and employees alike regarding what sort of behavior constitutes creation of a legally actionable hostile work environment. To give rise to a cause of action for a hostile work environment, the following criteria must be met:

• The behavior in question must discriminate against a protected class, such as employees of a certain age, gender, race or religion;
• The behavior must be pervasive and continuous over an extended period of time;
• The hostile behavior must be severe enough to render the employee’s adequate performance nearly impossible; and
• It is reasonable to assume that the employer knew about the hostile behavior and did not intervene in a meaningful manner.

Wage Payment Disputes

The Fair Labor Standards Act (“FLSA”), the Pennsylvania Minimum Wage Act (“PMWA”), and the Pennsylvania Wage Collection and Payment Law (“WPCL”) were all enacted to ensure that employees receive fair pay for their labors. They include provisions related to minimum wage, overtime compensation, hours worked, and employee classifications.

While the language of these statutes may seem straightforward, there is often confusion between employers and employees regarding the technical nuances of each law. Some areas where confusion frequently arise include:

• Compensable time. “Compensable time” is any time spent doing work for the benefit of an employer, whether this work occurs on the employer’s premises or not. Whether or not a certain activity counts toward compensable hours will depend on the specific facts of each case. Disputes often arise in regards to travel time, lectures and training time, rest and meal periods, or waiting and on-call time. If you are unsure whether an employee’s activities constitute compensable time, it is best to seek the advice of a small business attorney immediately to prevent potential wage disputes and litigation.
• Exempt employees. An exempt employee is an employee who is not subject to the minimum wage and overtime compensation provisions of the Fair Labor Standards Act. Whether or not an employee qualifies as exempt requires a determination of that employee’s job duties, work schedule, and salary. Generally speaking, exempt employees are usually those who work in an administrative, executive, or professional capacity, and who exercise discretion and judgment in the performance of their job duties.

Family Medical Leave Act (“FMLA”) Disputes

The FMLA provides eligible employees with the right to take up to 12 weeks of unpaid leave from work over the course of a 12-month time period to care for their serious medical condition or the serious medical condition of an ailing family member. If the requisite eligibility criteria are met, then an employer cannot terminate an employee for exercising his or her right to take leave under the FMLA. In order for FMLA rights to apply, the following criteria must be met:

• The employer must employ at least 50 employees, either full-time or part-time, within 75 miles of the work site;
• The employee requesting leave must have worked for his or her employer for a minimum of 12 months and 1,250 hours;
• The employee or the employee’s immediate family member must be facing a “serious medical condition,” which is defined as a physical or mental illness, impairment or injury that requires the continued treatment of a healthcare professional. This includes the birth or adoption of a child; and
• The employee must give the employer at least 30 days’ notice that he or she will be taking FMLA leave if the illness, injury, or impairment is foreseeable, and as soon as possible if it is not.

When these eligibility criteria are met, an employer is obligated to grant the request for leave, and may not in any way retaliate against the employee for exercising his or her FMLA rights. Additionally, the employer must notify the employee in writing that the leave counts against that employee’s annual 12-week FMLA entitlement.

Bringing Claims

In addition to defending yourself and your business against lawsuits, you may occasionally need to go on the offensive to protect your business’ assets and reputation. When you are faced with such threats to the success of your organization, it is important to contact an experienced business litigation attorney immediately to minimize the risk of incurring any irreparable damage.

Non-Compete & Non-Disclosure Agreements

Non-compete and non-disclosure agreements (otherwise known as restrictive covenants) are a standard aspect of most employment contracts. The goal of these agreements is to prevent skilled employees who are privy to important business information from leaving their positions with one business and using any skills or knowledge they gained as part of their employment to work for that business’s competitors.

While small businesses have the need and the right to protect their interests through these agreements, the terms of these agreements cannot be unduly burdensome on the employee. In order to be enforceable, non-compete, and non-disclosure agreements are subject to a number of limitations. Such limitations include:

• Scope, duration, and geographic limits. Non-competes and non-disclosure agreements must be reasonable in terms of how long they last, how far they reach, and what job activities they preclude. There is no bright-line rule for what terms are unduly burdensome; rather, a court will decide based on the specifics of each employment relationship at issue. If you have questions regarding what constitutes a valid non-compete or non-disclosure agreement, it is best to seek out the advice of a small business attorney.
• Consideration. As with all contracts, the employee agreeing to give up his or her rights through a non-compete or non-disclosure agreement must receive something of value in exchange for his or her promises. When the contract is signed at the outset of an employment relationship, the offer of employment counts as the “something of value” necessary to make the contract valid. However, if an employee signs one of these agreements after having worked for the employer for some time, he or she will need to receive something extra, such as a raise or bonus to which he or she was not already entitled.
• Legitimate business interest. An employer cannot force an employee to sign a restrictive covenant simply to eliminate potential competition. The employer must be able to point to a specific, legitimate business interest that necessitates the creation of such agreements.

Breach of Contract

Contractual relationships are the centerpiece of any business relationship, be it with customers, employees, suppliers. When one party to a contract does not live up to its end of the bargain, it is imperative that you take swift legal action to protect your rights.

To prove that a contractual breach has occurred, you must be able to show that (1) a contract existed, (2) one party to the agreement breached a duty or responsibility laid out in the contract, and (3) the second party suffered damages as a result of this breach. Breach of contract disputes can arise in a number of contexts, including:

• Transaction and unpaid invoice disputes
• Construction contract disputes
• Restrictive covenant and other employment contract disputes
• Commercial real estate disputes

Commercial Disparagement

The success of any business is largely dependent on its reputation. As such, you want to ensure that negative, false information does not make its way to your consumer base.

Defamation (known as “commercial disparagement” in the small business context) is the issuance of a false statement against an individual or entity. Small businesses may have a legal remedy against a person or entity that has made negative remarks about the business’s products or services if:

• The statement is false;
• The person or entity that made the false statement intended to cause financial loss to the business, or reasonably should have known that financial loss would result from the publication of such statements;
• Financial loss does in fact result; and
• The person or entity that made the false statement either knew of the statement’s falsehood or acted in reckless disregard for the truth when the statement was made.

If you need litigation or legal advice, call us because we know how to analyze your situation and create a legal plan of action.