Posts from: February 2015

Limits on Protection for Facebook Posts

Several months ago, we blogged about employee protections afforded by the National Labor Relations Board with respect to social media postings (Increased Focus on Employer Policies and Handbooks).  The board has been very active the past several years making determinations regarding whether employees’ work-related Facebook posts are the type of protected concerted activity afforded protection under section 7 of the National Labor Relations Act (NLRA). In most of the cases it has considered, the board has determined that employees’ work-related communications via social media were protected concerted activity subject to the protections of the NLRA.  In a recent decision, however, the board ruled in a case involving the type of social-media communications that are so inappropriate that they lost their protection.

Generally speaking, the 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.

In the recent case of Richmond District Neighborhood Center, the issue before the board was a Facebook “conversation” between two employees.  The two employees worked for a teen center in San Francisco.  At the end of the center’s 2012 summer program, the employer extended offers of employment to both employees for the 2012–2013 school year and the 2013 summer program. However, one of the employees was demoted due to a negative performance evaluation.

After receiving their offer letters in August 2012, the two employees engaged in a Facebook ‘conversation’ full of profanity.  The ‘conversation’ also included a former student participant in the teen program.  The two employees discussed their intent to be regularly absent from work, plan activities for the students without obtaining the employer’s authorization, play loud music and teach the student participants to spray graffiti. The employees’ exchange was visible to any person designated as a Facebook “friend” of either of the employees. The day after this exchange, another employee of the teen center sent screen shots of the Facebook exchange to management, and the employer rescinded both employees’ offers. The employees challenged their terminations.

The board concluded that “the pervasive advocacy of insubordination in the Facebook posts, comprised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the Act’s protection and render the employees unfit for further service.” The board’s decision was based primarily on the type of the misconduct the employees advocated.

To discuss whether or not your employees’ communications via social media posts may be protected as a type of protected concerted activity under section 7 of the NLRA, 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

REMINDER: New Illinois Law Limits an Employer’s Ability to Inquire Into Job Applicant’s Criminal History

The Illinois “Job Opportunities For Qualified Applicants Act”, which took effect on January 1, 2015, prohibits employers from inquiring about or into, considering, or requiring disclosure of the criminal record or criminal history of an applicant on a job application. In passing the Act, the Illinois legislature found that “it is in the public interest to do more to give Illinois employers access to the broadest pool of qualified applicants possible, protect the civil rights of those seeking employment, and ensure that all qualified applicants are properly considered for employment opportunities and are not pre-screened or denied an employment opportunity unnecessarily or unjustly.” The Act applies to all employers with 15 or more employees. The Act specifically excludes three types of employers: (i) employers required by federal or state law to exclude applicants with certain criminal convictions; (ii) employers that require a standard fidelity or equivalent bond where one or more specific criminal convictions would disqualify the applicant; and (iii) employers that employ individuals licensed under the Emergency Medical Services (EMS) Systems Act. An employer may inquire into an applicant’s criminal background only after an applicant has been deemed qualified for the position and notified that he has been selected for an interview, or, if there is not an interview, only after a conditional offer of employment is made to the applicant. Employers that violate the Act are subject to civil penalties imposed by the Illinois Department of Labor. The Act does not, however, create a private cause of action for aggrieved job applicants.

To discuss any questions you may have about the effect of the Job Opportunities for Qualified Applicant Act on your business or how you can revise your employment policies to comply with the Act, please contact:

Kristen E. O’Neill at:

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

Why the Business Owner Should Plan for Business Continuity

Many business owners do not believe that they will die while they own the business.  They feel that they have all the time in the world to plan for the succession of their business.  Often the owner will have the attitude of “If I die…”, not “When I die…”. Business owners have a tendency to believe that there will always be more time to make decisions relating to succession planning.  Often owners face various personal obstacles to plan for the future of the business without them, such as:

Unwillingness to plan.  The owner may be unwilling to plan, believing that he or she is in charge and no one can tell him or her “what to do”.

Inability to Plan. The owner may believe that he or she does not know how to plan for the succession of the business.

Mistaken Belief That a “Good” Will or Trust Is Enough. The owner may believe that his or her estate plan is sufficient.

Unrealistic Expectations of the Future.  The owner may believe that the business is so successful and there is so much wealth involved, that the business can take care of itself.

Conflict Between Business Succession and Financial Security.  The owner may believe that the owner’s financial security is dependent upon the business and that if the owner relinquishes control, then there will be no financial security.

Fear of Making the Wrong Choice.  The owner may have a fear that he or she is making the wrong choices for leadership or for ownership of the business.

Fear of an Adversarial Process. The owner may feel that he or she does not want to fight with the next generation and that everyone will end up angry with each other.

It is very important for the owner to overcome the typical fears associated with the business succession planning process.  A proper plan is more than an estate plan and is intended to give the owner a high degree of control over the process, provide the business with the greatest chance to succeed without the owner’s day to day involvement and to provide the owner with the greatest opportunity to enjoy financial security.  If you do not properly plan for the continuity of your business, then the relationships the business has with its employees, vendors, customers and others may be jeopardized.  Also, if you have family members in the business or key, trusted employees, then you should plan for the continuity of the business and communicate with them what your plans are. It does not have to be an adversarial process. If you fail to properly plan for the business and decide to leave it to chance, then you are leaving your (and possibly your family’s) financial security to chance.

We have helped many business owners plan for the transition of the ownership and management of their businesses to the next generation and have helped them successfully implement that plan. As a result, the owners have managed to maintain a degree of control over the process to the extent that they desired and they have also helped ensure their financial security.

We would be pleased to answer any questions you might have and to help you through this process. If you have any questions about planning for the continuity of your business, please contact:

Morris R. Saunders at:

msaunders@lgattorneys.com or 312-368-0100

Is Your Family Business or Closely Held Business Ready for Ownership Succession?

Every family owned and closely held business must eventually address the issue of ownership succession.  It should be a priority action item for all owners. Many owners see their business as their retirement plan. If they do not properly prepare the business and the next generation of leaders, then there may not be enough in the “retirement plan” for the owner to actually retire. Sometimes the owners are faced with clear cut choices as to who will take over their business and therefore feel that it is not necessary to focus on the process.  However, if the owner merely transfers ownership and/or management of the business to the next generation without getting the business and the future leaders ready for the transition, the business may fail regardless of the good intentions of all involved. With respect to the younger generation,

  • Is the successor qualified to run the business? Does he or she have the right “tools”, the right training and/or experience?
  • Is there more than one successor? If so, what will be the roles and responsibilities of each? Will ownership be equal? Will control be equal?

With respect to your business,

  • Are the company’s governance records (e.g., by-laws, minutes, stock records) complete and current?
  • Does your company have an employee handbook that is current?
  • Are there valid employment agreements for key employees with enforceable restrictive provisions?
  • Do the loan documents permit the transfer of ownership?
  • Are the agreements with vendors and suppliers in place?
  • Are there agreements with key employees that give them an incentive to stay employed with the business, such as deferred compensation plans?
  • Is the business in compliance with leases of real estate and equipment? Do those leases permit a transfer of ownership or do they require the Lessor‘s consent?
  • Is intellectual property protected? If some of the intellectual property is owned by the senior generation, is it properly documented? How will the business continue to use the intellectual property?

You might also wish to consider how the business will succeed with or without you. What will be your role in the transition? Will you retain an office, be on the board of directors? Determining who will be the next owner(s) and manager(s) may be easy or difficult but you must consider numerous factors, some of which are outlined above to give the new owner(s) and manager(s) and the business the best chance to continue to prosper.  We have helped many clients pass the ownership and management of their business to the next generation and have watched as the business has continued to thrive.

If you would like our assistance through this process, please contact:

Morris R. Saunders at:

msaunders@lgattorneys.com or 312-368-0100

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