Here’s some good news for employers that use arbitration agreements: A California appellate court has ruled that when only part of an arbitration agreement turns out to be invalid because it is “unconscionable,” the rest of the agreement remains intact if the invalid section can easily be removed.

The Texas Supreme Court has ruled that an arbitration agreement presented as a condition of employment is valid even though it was initially drafted by an HR management company that no longer manages personnel matters. The court looked carefully at the arbitration agreement and concluded it was a binding contract—partly because it contained a clause that allowed the employer to end the agreement prospectively only.

California employers don’t have many options for preventing employees from competing once they move on to another employer. For example, noncompete agreements are illegal here. The courts also look askance at other attempts to restrain competition and prevent former employees from practicing their professions even if such restrictions are temporary.

Q. Do we have to conduct regular performance appraisals and give annual increases? We told a new hire that we would, but now don’t have time or money to do so.

Here’s an upside to having a comprehensive collective-bargaining agreement: Employees who claim they were denied benefits they had been promised can’t sue under Ohio state contract law if the subject of the lawsuit is covered by the union contract.

The Texas Payday Act allows employees to sue for commissions earned but unpaid after termination. But that doesn’t mean that employees are always owed such commissions. If they violated their fiduciary duty to their employers by disclosing confidential information to a competitor, it’s legitimate to withhold pay.

By now, you should have an electronic communications policy and know to block computer access to newly terminated employees. But it’s also wise to prohibit current employees from forwarding e-mails from the company computer to their personal e-mail accounts outside the company.

Do you rely on restrictive agreements (also known as noncompete agreements) to prevent employees from working for the competition and stealing your customers? If so, now is a good time to make sure those agreements will stand up in court.
A recent 11th Circuit Court of Appeals case, Proudfoot Consulting Co. v. Gordon, illustrates the obstacles and complexity that can trip up employers that take former employees to court.

The last thing you want after settling a discrimination or harassment complaint is for the case to rear its ugly head again. That’s why settlement agreements should include clear language releasing you—the employer—from any further liability. Your best bet: Have your attorney prepare all your settlement agreements to make sure they meet state and federal laws.

Employers sometimes erroneously assume that employees working under a set-term employment contract don’t have any rights once the contract expires. That’s simply not true. In fact, refusing to entertain a contract renewal for a discriminatory reason can be the basis for an employee’s lawsuit.

Here’s a potential electronic communications problem you may not have considered. An employee who forwards e-mail from a company computer and e-mail account to his personal address may end up using those e-mails later in litigation against the company. That’s one reason it makes sense to prohibit employees from forwarding e-mails to their personal e-mail accounts.

If you pay commissions under a written compensation plan that covers commissions earned only while the employee works for your company, be careful how you handle terminations—and discussion concerning payment of further commissions. In some circumstances, you could inadvertently create additional liability for unpaid commissions ...

Q. I have certain employees that I don’t want leaving my business to work for a competitor. I am leery about using a noncompetition agreement because I know that courts can be hostile toward them. I understand they can cost a lot of money in legal fees to enforce. Are there any alternatives for me to consider?

Oral agreements are as binding as written ones, but they can be considerably less precise. Consider this case, in which a disgruntled employee claimed an oral agreement affected future compensation:

If your organization uses arbitration agreements to help keep employment disputes out of court, make sure the agreement is drafted to be as broad as possible. Your best bet: Have an attorney write or review the agreement.