Posts from: December 2014

Increased Focus on Employer Policies and Handbooks

With the increasing prevalence of employees’ use of social and other electronic media, crafting appropriately narrow internal policies and employee handbook provisions to address the myriad issues that arise in connection with employees’ use of electronic media is vital.

It is widely accepted that employees should not have reasonable expectations of privacy when working on an employer’s computer since company computer systems are owned and/or provided by the company for the purpose of conducting company business. Many companies monitor employee e-mail and Internet activity, in part because employers are often liable for their employees’ actions. Even so, employers must be careful as they enforce their e-mail communications policies.

Generally speaking, the National Labor Relations Act (NLRA) protects non-governmental employees engaged in activities to influence change in the workplace (so called “protected concerted activity”) – even if those employees are not union members and the activity has no connection to union activity or a labor union. Thus, the NLRA protects the rights of all private sector employees to join together, with or without a union, to improve their wages and working conditions.

Over the past few years, the General Counsel of the NLRB has issued complaints against employers that have discriminatorily enforced otherwise valid communication policies. In one case, the NLRB issued a complaint against a distribution company that had in place a rule prohibiting all non-business e-mail communications. However, the employer failed to consistently enforce the rule, allowing non-business e-mail and only disciplining employees when they used e-mail for union solicitations. More recently, the NLRB found that an employer selectively enforced its electronic communications policy in a case where it terminated an employee who e-mailed a petition to the company’s Board of Directors. The petition sought development of a method for employees to directly submit workplace concerns. The evidence in this case showed, contrary to the policy, that the employer’s e-mail policy permitted reasonable personal use of the company’s e-mail system and that employees frequently used their computers for personal purposes. Thus, the employer’s claim that the employee had improperly used its e-mail proved to be a losing argument.

While these few examples of e-mail policy enforcement issues may appear to only apply to unionized companies, this issue may also affect non-unionized companies.

As many are aware, the NLRB has also dealt several blows to employers in recent years regarding employer social media policies and how such policies violated employees’ rights to “concerted activity.” In June of this year, however, in a ‘win’ for an employer, an administrative law judge (ALJ) considered the legality of a restaurant chain’s social media policy which provided that employees not post information regarding the company, their jobs or other employees which could lead to morale issues in the workplace or detrimentally affect the company’s business. The policy also urged employees to make clear that the views they post were the employee’s personal views and not the company’s and requested that employees put a disclaimer on their social media pages stating that the views expressed were the employee’s alone and not the views of the employer. The policy also stated that no employee could use any words, logos or other marks that would infringe upon the intellectual property rights of the company. The ALJ in this case found that the policy when read in its entirety did not forbid employees from engaging in rights protected by the NLRA, but only urged them to be considerate of and civil toward others when putting such items on the Internet. The ALJ also interpreted provisions of the rule precluding use of the company logo in a manner that infringed on the company’s intellectual property rights as simply protecting the company’s legal rights concerning its logo, and did not implicate the employees’ rights under the NLRA.

Workplace policies regarding non-disparagement and confidentiality have also recently come under attack. For example, an employee of Quicken Loans signed an employment contract with broad confidentiality and non-disparagement provisions wherein she agreed to hold “in the strictest of confidence” any “nonpublic information relating to or regarding the company’s business, personnel, operations or affairs.” She also agreed not to “publicly criticize, ridicule, disparage or defame the company or its products, services, policies, directors, officers, shareholders or employees” in “any written or oral statement or image” including emails or social media posting. After leaving Quicken Loans for a competitor, Quicken Loans sued its former employee for allegedly violating certain provisions of her employment contract. The employee filed charges with the NLRB, and the NLRB upheld an administrative law judge’s ruling that Quicken Loans’ confidentiality clause violated the NLRA by restricting employees from discussing compensation or job conditions with co-workers or union organizers. The NLRB also rescinded the non-disparagement provision finding that “within certain limits, employees are allowed to criticize their employer and its products” as part of their rights under the NLRA. Similarly, employer policies that prohibit employees from complaining to the media or requiring employees to obtain permission from management prior to speaking with reporters are unlikely to withstand legal scrutiny.

The prevalent use of technology in the workplace and increased scrutiny by the NLRB on all employees’ rights to engage in protected concerted activity dictates that every employer have policies in place which set forth appropriate and enforceable rules with respect to employees’ use of company’s computer systems, e-mail and the Internet. It is important to review technology and communication policies periodically, adapt the policies so they evolve as technology changes and consistently enforce the policies.

To discuss your business’s internal policies, employee handbook or employment agreements, please contact:

Jonathan M. Weis at: jweis@lgattorneys.com or 312-368-0100

or

Mitchell S. Chaban at: mchaban@lgattorneys.com or 312-368-0100

Attention Businesses: Improper Solicitations for Corporate Reporting Services

Businesses should be alerted to the following which was posted on the Illinois Secretary of State’s website….

Corporate Solicitation Alert— A firm called Annual Business Services is contacting Illinois businesses in an attempt to collect a $125 fee to fill out a corporation’s “Annual Minutes Form.” The Illinois Business Corporation Act does not require corporations to file an “Annual Minutes Form” or pay such a fee with the state or any private entity. If a business would like to file a complaint in relation to this solicitation, please contact the Illinois Attorney General’s Office Consumer Fraud Division at 800-243-0618.

Additionally, if you would like to discuss any corporate reporting correspondence from Annual Business Services or any other entity which you suspect may be improper, or to discuss the actual corporate reporting requirements for Illinois before year-end, please contact:

Morris R. Saunders at:

msaunders@lgattorneys.com or 312-368-0100

Reporting of Cyber Crimes to the Internet Crime Complaint Center

Internet criminals steal millions of dollars each year through various cyber crimes including, but not limited to, identity theft, intellectual property theft, computer intrusions (hacking), theft of trade secrets, online extortion, and international money laundering. Internet-related crime, like any other crime, should be reported to appropriate law enforcement authorities. It is often unclear, however, what authorities an internet crime should be reported to.

The Internet Crime Complaint Center (“IC3”) was established as a partnership between the FBI and National White Collar Crime Center, to receive complaints related to Internet crimes. As Internet crime complaints are reported online, IC3 electronically compiles the data which is reviewed by trained analysis who then refer the complaint to the appropriate federal, state, local, or international law enforcement agency for investigation.

Because reported Internet crimes often overlap with other reported matters, the reporting of internet crimes helps law enforcement agencies identify and combat Internet crime schemes.

If your or your business has been the victim of an Internet crime you can report this crime to IC3 at: https://www.ic3.gov/default.aspx.  This website also includes helpful information about Internet crimes including current and ongoing Internet trends and schemes.

To discuss any questions you may have regarding this issue, please contact:

Kristen E. O’Neill at:

(312) 368-0100 or koneill@lgattorneys.com.

New Rules Governing How an LLC Can Get Back in Good Standing After Being Dissolved

The Illinois General Assembly recently amended the procedures dictating how an LLC can get back in good standing, conduct business legally and not exercise the right to wind up the LLC’s business.

Dissolution means the legal end of an LLC’s existence. Generally, a limited liability company (“LLC”) in Illinois can be legally dissolved in any number of ways, including the LLC itself voluntarily filing articles of dissolution with the Secretary of State or the Secretary of State administratively dissolving the LLC when it fails to timely file annual reports or otherwise follow particular legal requirements, such as paying fees. The LLC itself continues after dissolution only for the purpose of exercising its right to wind up its business, i.e., winding up its affairs, such as paying off creditors, distributing the remaining assets to its members, etc.

There are times when the members may have a change of heart and wish to continue the LLC’s business dissolution, opting out of the right to wind up the LLC.

Pursuant to Pub. Act 098-0720 (eff. July 16, 2014) (amending 805 ILCS 180/35-3 (West 2014)), an LLC that desires to no longer be dissolved and wishes to not wind up and terminate its business must do the following: (1) file with the Secretary of State all mandatory reports; (2) pay to the Secretary of State all fees and penalties, if any; and (3) file with the Secretary of State articles of revocation of dissolution. To be effective, the articles of revocation of dissolution must include, among other things: (a) the name of the limited liability company at the time of filing the articles of dissolution; (b) the effective date of the dissolution that is being revoked; (c) the date the revocation of dissolution was authorized; (d) a statement that the members have unanimously waived the right to have the company’s business wound up and the company terminated; and (e) the address and name of the LLC’s registered office and registered agent upon the revocation of dissolution of the LLC.

To discuss any questions you may have about limited liability companies, including their formation, reporting requirements, dissolution, winding up or terminating, please contact:

Eli Korer at:

(312) 368-0100 / ekorer@lgattorneys.com

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