This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Reston Town Center that specializes in federal employee, security clearance, retirement, and private sector employee matters. They write biweekly on RestonNow.

In the private sector, non-compete agreements between employers and employees are becoming more prevalent.

Non-compete agreements generally involve an employer’s decision to impose certain restraints or restrictive covenants on an employee during, and for a period of time after, the employment relationship. Examples of such restraints or restrictive covenants include post-employment covenants not to compete with the employer’s business and non-solicitation of the employer’s customers and employees.

Although federal, state, county, or municipal laws may regulate non-compete agreements differently, under Virginia case law a non-compete agreement must be reasonable to be enforceable. Only a court may decide, as a matter of law, whether a non-compete agreement is enforceable. However, the employer bears the burden of proving that its non-compete agreement is enforceable under Virginia law. A reasonable non-compete agreement generally consists of three components:

• It should be no more restrictive than necessary to protect the employer’s legitimate business interests;
• It should not unduly burden the employee’s legitimate efforts to earn a livelihood; and
• It should be consistent with sound public policy.

The Virginia courts typically look for the following factors when assessing whether a non-compete agreement is reasonable:

• The duration of the restrictive covenant;
• The geographic scope of the restrictive covenant; and
• The scope and the extent of the restricted activity.

Whether the duration, geographic scope, and scope and extent of the restraint imposed by the employer are reasonable depends upon the specific facts of each case. Thus, every non-compete agreement should be analyzed separately and by balancing the non-compete agreement’s unique provisions with the parties’ specific circumstances. Generally, however, non-compete agreements that are more narrowly tailored in geographic scope and duration are more likely to be considered reasonable.

Likewise, overly broad and ambiguous non-compete agreements, or agreements involving employers that do not have a legitimate business interest in the restrained activity, may be unenforceable. Virginia courts will generally not modify non-compete agreements that are ambiguous. Rather, the courts usually construe ambiguous clauses in non-compete agreements against the employer.

Employers enforcing non-compete agreements can typically seek preliminary and permanent injunctions; lost profits damages; damages for lost good will; liquidated damages (if provided in the agreement); and attorneys’ fees. Since the consequences of signing non-compete agreements can be extremely costly and problematic for many employees, we recommend that employees obtain the advice of an attorney, preferably before the employee signs the non-compete agreement.

Virginia courts also recognize non-disclosure agreements (also referred to as NDA or confidentiality agreements) and non-solicitation agreements. The courts generally analyze such agreements in the same way that they analyze non-compete agreements.

Our firm represents federal employees and private, state, and county employees and employers in Virginia, the District of Columbia, Maryland, Massachusetts, Maine, Michigan and New York regarding non-compete agreements, non-disclosure agreements and non-solicitation agreements as well as various other employment matters.

We can be contacted at www.berrylegal.com or by telephone at (703) 668-0070. Please also visit us on Facebook at www.facebook.com/BerryBerryPllc.

  

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Reston Town Center that specializes in federal employee, security clearance, retirement, and private sector employee matters. They write biweekly on RestonNow.

Federal employees filing for disability retirement are either covered under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). One of the key components of a federal employee’s successful disability retirement application is a well-written physician’s statement.

When evaluating a federal employee’s disability retirement application, the Office of Personnel Management (OPM) is primarily seeking medical evidence that supports the federal employee’s information provided in his or her application. In order for OPM to support a federal employee’s claim that he or she is disabled and unable to provide useful and efficient service in his or her current position, the federal employee should provide a well-written and detailed physician’s statement when submitting the application. OPM most likely will deny a disability retirement application without such a statement.

OPM’s form SF-3112C and instructions do not actually provide much detail as to what specifically should be included in the physician’s statement. However, based on our experience, it is crucial that the physician provide a great deal of detailed medical documentation in the statement.

The best type of physician’s statement further addresses the federal employee’s specific medical conditions and symptoms, and how they prevent the federal employee from performing his or her job duties as described in the federal employee’s position description.

The federal employee should provide the physician with a copy or summary of his or her official and actual job duties. Keep in mind that OPM is not necessarily focused on whether the federal employee is fully disabled from completing a particular type of work. OPM is more interested in detailed medical evidence establishing how the federal employee is disabled in such a way that prevents the employee from performing his or her current job duties.

If a federal employee retains our firm to assist in his or her disability retirement application, we usually coordinate with the employee’s physician regarding the statement, assist the physician with information that might be important to include in the statement, and help to answer the physician’s questions about the disability retirement process.

In addition, we often assist the physician with the actual drafting of the physician statement since we recognize that physicians have very busy schedules. Also, it is sometimes helpful to offer to pay for the physician’s time in preparing the statement, if appropriate.  Typically, most physicians want to help their patients in the disability retirement application process and are usually the first to recommend disability retirement to the federal employee.

When considering OPM disability retirement, it is important to obtain the advice and representation of legal counsel. Our firm represents federal employees in the disability retirement process before various federal agencies and OPM. Please contact us at www.retirementlaw.com, www.berrylegal.com, or by telephone at (703) 668-0070, for a consultation to discuss your individual disability retirement matter.

  

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Reston Town Center that specializes in federal employee, security clearance, retirement, and private sector employee matters. They write weekly on Reston Now.

Legal issues involving whether an individual was correctly hired as an independent contractor or employee often arise for many businesses and individuals. The problem with an independent contractor’s or employee’s status is often not recognized until the individual separates or is released from his or her position and subsequently contends that the business either owes the individual compensation (e.g., unpaid wages, overtime, etc.) or should have paid and deducted taxes because the individual was really an employee rather than an independent contractor.

Independent contractors are self-employed and pay their own taxes. Businesses do not need to set aside payroll taxes for or provide minimum wage or overtime to independent contractors.

Individuals asserting their employee status often bring wage and tax claims to their local wage and hour office, the Department of Labor (DOL), the Internal Revenue Service (IRS), and other agencies in an attempt to resolve a dispute with their employer. When the DOL, IRS, or state wage and hour office reviews these types of disputes, the agency typically applies its own test to determine whether the business should have classified the individual as an employee.  In our experience, we have found that when the issue is unclear or debatable, government agencies tend to find that the individual was an employee.

Although each agency has its own separate test and each test varies, some of the major issues that the DOL, IRS, and other wage/hour offices consider in evaluating independent contractor and employee status include the following:

• The extent to which an individual’s services are “an integral part” of the employer’s business. For example, an agency will look at whether the individual supervises any company employees or provides primary services.
• The length of time that the individual has worked for the same business. If an individual has performed work for an employer for a long period of time, the individual is more likely to be considered an employee.
• Whether the individual uses his or her own equipment or the employer’s equipment. The agency will determine whether the individual has his or her own office offsite or whether the individual performs the work at the employer’s office. If the business provides the office space or tools to perform the work, the business is more likely to be considered an employer of the individual.
• Whether the individual is reimbursed for materials or supplies in performing the work.  If an employer reimburses an individual for expenses related to work materials and supplies, the individual is more likely to be considered an employee.
• Whether the individual decides on the hours he/she works or the business sets the individual’s hours. This is an important consideration. If the business sets the hours of work for an individual, then he or she is more likely to be considered an employee.
• Whether the individual invests in insurance, advertising, business cards or bonding.  It can help to establish that the individual is an independent contractor if the individual maintains these types of expenses on his or her own.
• Whether the individual performs work for other businesses.  If the individual works for more than one business, such information can be used to argue that the individual is an independent contractor.
• The level of skill needed to perform the work for the business.  Government agencies usually find that if less skill is needed to perform the work (e.g., general clerical), then it is less likely that the individual is an independent contractor.
• Whether the individual or the business provides training.  If the individual provides his or her own training, it would be a factor in showing that the individual is likely an independent contractor and not an employee.  However, if the business pays for the individual’s training, then the individual would likely be considered an employee.
• Whether the individual was paid a flat fee or hourly for work.  While not determinative, if an individual is paid hourly then it is more likely that the individual is an employee.

When an individual is incorrectly classified, the risks are usually high and the outcome can be significant if the business and the individual contest or dispute the individual’s independent contractor or employee status.  Therefore, it is important for businesses and individuals to correctly classify whether an individual is an employee or independent contractor before work begins.

If an employer ultimately has to provide back pay, damages, pay back taxes and/or pay penalties, the costs to the employer can be significant. Conversely, if an individual should have been classified as an employee but did not understand the difference at the beginning of his or her employment, the costs to the individual in paying his or her own taxes can be significant as well.

We recommend that businesses and individuals obtain legal advice early on to avoid wage and hour issues that may arise later involving disputes over whether the individual was an employee or independent contractor.

We have represented both businesses and individuals regarding disputes over an individual’s employee or contractor status. If you are interested in obtaining legal advice, please contact our office at www.berrylegal.com or (703) 668-0070 to schedule a consultation.  Please also visit us on Facebook.

Please be advised that this information is strictly for informational purposes only and does not constitute legal advice.