TO: Intern, Greene’s Jewelry Wholesale LLC
FROM:Leggette, DelceidaSupervisor, Greene’s Jewelry Wholesale LLC
DATE: April 21, 2020
SUBJECT: Greene’s Claim and Defense Against Lawson
Introduction
After suing Ms. Jennifer Lawson, a former Junior Executive Secretary, for breach of confidentiality agreement or the nondisclosure agreement (NDA), she countersues Greene’s Jewelry Wholesale LLC for wrongful termination. The strength of Greene’s legal claim is that Ms. Lawson signed the NDA, by which she conceded not to leak any information she might obtain from Greene’s with regards to the process utilized in manufacturing Ever-Gold. On the other hand, the strength of Greene’s legal defense is that Ms. Lawson was laid off because the company was downsizing rather than the issue of pregnancy. It would also be pragmatic to identify the possible arguments Ms. Lawson and her lawyer would make.
Facts and Laws
Employment Discrimination or Unlawful Termination
The Americans with Disabilities Act stipulates that a woman who is temporarily incapable of performing her job because of a medical condition associated with pregnancy or childbirth must be treated by her employer the same way as temporarily disabled employees are treated (USEEOC, n.d.). To cite an example, she may be provided light tasks, alternative assignments and unpaid or disability leave as those provided for temporarily disabled employees. In addition, impairments as a result of pregnancy such as diabetes during pregnancy or preeclampsia or pregnancy-induced high blood pressure and damage to organs including the liver or kidneys may be considered disabilities covered by the ADA (USEEOC, n.d.; “Preeclampsia – Symptoms and causes”, 2020). An employer may also be obliged to provide proper accommodations (such as leave or adjustments to enable the pregnant employee to carry out her job) for an impairment or undue hardship associated with pregnancy.
The Pregnancy Discrimination Act (PDA) states that an employer who permits temporarily disabled workers to take disability leave or even leave without pay must also permit a worker who is temporarily incapacitated due to pregnancy (“History of the Pregnancy Discrimination Act”, 2014). An employer is prohibited from singling out pregnancy-associated conditions for procedures to gauge an employee’s capacity to work. The facts that Ms. Lisa Peele of the human resources informed her of the need to downsize and lay off all junior executive secretaries when Ms. Lawson requested for additional time off should not count as unlawful termination and did not violate the PDA nor the ADA.
Trade Secrets and Nondisclosure Agreement
Generally, trade secret protection grants owners the right to forestall the information that is lawfully within their control or management “from being disclosed, acquired or used by others without their consent in a manner contrary to honest commercial practice” (World Intellectual Property Organization, 2020). Customarily, unfair practices related to secret information comprise industrial espionage, breach of contract, breach of contract, breach of confidence and inducement to breach. Moreover, it encompasses a third party’s usage or leakage of a trade secret, whether he knew or was terribly negligent and unaware that certain practices were necessary in the procurement of confidential information.
While the trade secret protection conditions vary from one country to another, Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights or the TRIPS Agreement include some general measures (Trade Secrets Protection in the U.S., n.d.). This article stipulates that trade secret protection is applicable provided these conditions are met:
Countries generally apply criminal, administrative, civil or commercial law, particularly, tort or contractual law related to unfair competition. The owner of a trade secret may acquire damages from the individual who breached the trade secret due to its associated economic injury. Some countries’ trade secret laws may also allow injunctions or the discontinuance of the use of products that have been made using trade secret information as opposed to ethical commercial practices (World Intellectual Property Organization, 2020). The US federal government protects trade secrets through the Economic Espionage Act of 1996 or EEA. “Conviction under the Economic Espionage Act can result in a fine of up to $250,000 for an individual (up to $5 million for corporations), imprisonment up to ten years, or both” (Trade Secrets Protection in the U.S., n.d. p.22). The EEA makes misappropriation or stealing of trade secrets a federal offense.
Precedent
Due to the increasing number of litigations, employers might feel powerless when an employee announces her pregnancy. Nevertheless, the case of Madry v. Gibraltar National Corporation demonstrates that employers may win against discrimination claims if they are able to prove that their decisions and actions were based on logical and nondiscriminatory reasoning. In this lawsuit, Mandry, the plaintiff, took Family and Medical Leave (FMLA) from 2008 October until 2009 February due to her pregnancy. Upon inquiring about her return, she was told that she was being laid off due to a lack of job (Hunt 2013). Mandry sued the company claiming that she was wrongfully terminated.
Gibraltar National Corporation was granted summary judgment both at the District Court and the Court of Appeals as the company was able to provide evidence that the termination was legitimate and nondiscriminatory since its failure to restore the plaintiff’s employment was caused by a lack of work brought about by business downturn. The defendant also presented economic, production as well as labor data to support its stance. The court also explained that “Pursuant to 29 U.S.C.§2614(a)(3)(B), no employee is entitled to any right, benefit, or position of employment other than . . . [that] to which the employee would have been entitled had the employee not taken the leave. More specifically, an employee returning from FMLA leave is not entitled to restoration unless he would have continued to be employed if he had not taken FMLA leave” (Hunt 2013, p. 5). Therefore, the court affirmed the state of the law in relation to pregnancy.
An example of a federal case regarding the breach of nondisclosure agreement is Orthofix Inc. v. Hunter. Like Greene and Ms. In Lawson’s case, the plaintiff sued the defendant for the misappropriation of the company’s trade secrets and the breach of the nondisclosure provision stated in the defendant’s employment contract (Hunt 2015). Eric Hunter left Orthofix for a competitor and immediately began selling to former clients the same device made by his new employer. Similarly, upon termination, Ms. Lawson immediately shared Greene’s trase secret to Howell, which in turn, only slightly tweaked the process to create a product identical to Ever-Gold (Hunt 2015). The court of appeals concluded that the former employee breached his NDA with Orthofix.
Facts to be Determined
For Ms. Lawson to win a wrongful termination case based on pregnancy against Greene, she must show that she was treated differently than her colleagues and that this difference in conduct was based on her pregnancy. She must provide evidence portraying it was likely that her employer or HR supervisor mistreated her because of her pregnancy. It is also important to know whether the HR observed proper layoff practices including careful planning, application of diversity concepts in selecting the employees to layoff, attending to the needs of those who have been laid off, offering severance pay, behaving professionally and addressing the emotional impact (“Managing Downsizing by Means of Layoffs”, 2020). Was there a witness whether the termination was done properly or inhumanely?
Also, it is important to know whether MS. Lawson’s routine tardiness affected the decision to lay her off along with other junior executive secretaries. How about her attitude toward her senior and colleagues, as well as their attitude toward her when they found out she was pregnant? All of these could have significantly affected Ms. Lawson’s loyalty to the company. Did she intentionally or unintentionally pick up the confidential letter? Did she have any other physical or mental health condition not related to pregnancy such as depression? Having this information would shed light on whether the case is truly related to wrongful termination based on pregnancy discrimination.
Finally, what is Greene’s economic, production and labor data? How did it arrive at the decision to lay off all junior executive secretaries? Having this information would lead to the conclusion that Ms. Lawson had not been singled out and that Greene did not wrongfully terminate one or more employees.
References
History of the Pregnancy Discrimination Act. Jurist.org. (2014). Retrieved 21 April 2020, from
https://www.jurist.org/archives/feature/background-for-pda/.
Hunt, D. (2013). Case No. 12-1286: Madry v. Gibraltar Nat’l Corp. [Ebook] (p. 5). United
States Court of Appeals for the 6th Circuit. Retrieved 21 April 2020, from https://www.opn.ca6.uscourts.gov/opinions.pdf/13a0493n-06.pdf.
Hunt, D. (2015). Case No.15-3216, Orthofix, Inc. v. Hunter [Ebook]. United States Court of
Appeals for the 6th Circuit. Retrieved 21 April 2020, from
https://www.opn.ca6.uscourts.gov/opinions.pdf/15a0755n-06.pdf.
Managing Downsizing by Means of Layoffs. SHRM. (2020). Retrieved 21 April 2020, from
https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managingdownsizing.aspx.
Office of Policy and External Affairs United States Patent and Trademark Office. Trade Secrets
Protection in the U.S. [Ebook] (pp. 5, 6, 22). Retrieved 21 April 2020, from
https://www.nist.gov/system/files/documents/mep/marinaslides.pdf.
Preeclampsia – Symptoms and causes. Mayo Clinic. (2020). Retrieved 21 April 2020, from
https://www.mayoclinic.org/diseases-conditions/preeclampsia/symptoms-causes/syc-203
55745.
USEEOC. Pregnancy Discrimination. Eeoc.gov. Retrieved 21 April 2020, from
https://www.eeoc.gov/laws/types/pregnancy.cfm.
World Intellectual Property Organization. (2020). Frequently Asked Questions: Trade Secrets.
Wipo.int. Retrieved 21 April 2020, from
https://www.wipo.int/tradesecrets/en/tradesecrets_faqs.html.
Milestone Two:
Application of the Law to the Facts and Impact
Application of the Law to the Facts and Impact Assessment
All laws regarding maternity labor that relate to the termination of the contract between an employer and a pregnant woman are based on bias and discriminatory acts. This means that a pregnant woman’s working contract cannot be terminated due to her pregnancy or anything related to the pregnancy (Greenwald, 2016). However, in the case that is currently on the table, and that needs to be on the side of Greene’s Jewelry Wholesale LLC, the contract was terminated due to the company downsizing in employees. Furthermore, the woman that has filed to sue the company had committed trade secret theft and is being sued for that. In addition to that, she is being sued by the company she has worked in afterward for going to work for the competition after signing papers that forbid that sort of action.
Company’s Arguments
The main thing that the company has as leverage is the fact that the employee that they sued had taken the company’s trade secret and has given it to a third party without the right to handle such information. Company information is mostly confidential, especially the business’s main ‘invention’, their only, and truly. An employee is “not allowed to disclose [the secret] to anyone outside the company, and sometimes … not even tell others within the company” (Irish, n.d.). With this said, it is a far greater reason to fire someone than their pregnancy, pregnancy symptoms, or a complete lack of all. The law regarding the prohibition of the distribution of trade secrets clearly statesthat “information is power and that it is very relevant to the whole concept of strategic” (Sheikh, n.d.). The company’s argument can be strong in the sense that they were suspicious of the employee, they fired her and then it turned out that she used the company trade secrets to trade them. Even though the employee has not initially gotten fired because of this, saying that she was would not be far from the truth. Also, to actually win a case of wrongful termination based on discrimination, the woman should have evidence of being treated differently (NOLO, n.d.). Without evidence of being treated differently, other than the fact that she is pregnant, her arguments are invalid.
Assessing the Public
The public will generally pose as advocates for women’s rights and will do anything to make the woman the hero of the story as it is a common practice nowadays. Since pregnancy bias in the workplace is also a form of sex discrimination, “the Civil Rights Act of 1964 prohibits sex discrimination on the basis of pregnancy” (EEOC, 1978). Because of this, any act of discrimination upon a pregnant woman in a working environment that is not necessarily willingly an act of discrimination can be seen upon as discriminatory. This raises public questions such as why the woman, since pregnant, was not spared from getting fired, even though the movement is for obtaining the same rights for both men, women, and pregnant women. Moreover, the public should be familiar with the issue of leaking the company’s ‘Long-Gold’ secret as breaking confidentiality. If speculation were to exist that the employee was suspicious before getting fired, that would turn down the fuss around the so-called discrimination.
From the public perspective, the company could be seen as either discriminatory or cautious. The company is seen as discriminatory will occur within the fact that they fired a pregnant woman, however not because of her pregnancy. On the other side, it can be seen as cautious if they were suspecting that some of the employees, including here, were threatening to spread or sell the company’s trade secrets. Nowadays, confidential company files store “information such as pricing lists, formulae, contact information, marketing and strategic plans, client lists, costs, and financial information…” (Shaffer, 2008). Regarding this, the employee broke the agreement and went behind not only the employers from the jewelry but on the next employers too since she sought a job at a competitor company in only three weeks. This puts her in a bad position in front of the public since she willingly went behind the back of both of her previous employers.
Other Party
The other party that also sued the employee for breaking the arrangement had failed to try to incorporate the confidential formula in their business and ultimately compromising both businesses, but mostly the woman responsible. An employee should know that “In return for their salary, it is only reasonable to keep the employer’s confidential information a secret” (Irish, n.d.). However, not only did the employee find out about the information they have in their sleeve after getting fired, but she also used it after that which makes the law prone to misinterpretation in this case. Since the other’s company’s attempt of using their formula went horribly wrong and with a potential lawsuit from a client, it helps Greene’s Jewelry Wholesale LLC in obtaining its originality and glory. The confidentiality of any company’s secret formula is as relevant as that of Coca Cola “which is locked in a vault. Since it has not been patented, it has never been revealed” (Frankenfield, 2019). Thus, every company’s secret formula should be kept secret and not distributed to third parties.
Since the employee has had a comeback in breaking a company’s agreement, it could help the company that is pursuing the lawsuit because the contract termination was not due to discrimination. Furthermore, it was not due to any form of sex discrimination. A problem that can occur is that some of the courts that are assessing the case will reject rationale and hold “that a disloyal employee can lose authorized access while still officially employed” (Shaffer, 2008). This can put them in a similar situation like the one where they are no longer employed but have access which is difficult for courts to assess. However, the evidence lies in the occurrence of the formula mock-up in the other company in which she has worked afterward.
Avoiding the Situation in the Future
Situations like this have happened and will continue to happen. An employer can unknowingly fire a woman who had just found out she was pregnant and she could use that information against them. To avoid the situation “in the future, an employer should never wait to address an issue with an employee; the longer you wait for the more likely it is to look like some sort of retaliation” (Lucas, 2018). This roughly means that no employee should be kept at work no matter their physical state, gender, being pregnant or not. If the company has downsized in the number of employees in the future, they will cut back whomever they want to in order to save the company. If one of the future employees that are going to be terminated as an employee happens to be a pregnant woman, they need to be fully aware of why they are being fired and not because of their current state.
Conclusion
All things considered, the court could easily dismiss the woman’s testimony because of her lack of valid arguments and the things she did following her termination. Whether it was wrongful or not, it was not discriminatory of her pregnancy and she cannot prove she was discriminated against. Also, the other party whose arrangement was broken with that same woman can show her off as untrustworthy and that her testimonial is, because of that, irrelevant. The company can win the dispute easily because none of the initial statements that plead them guilty are supported by evidence or valid arguments.
References
EEOC (1978). The Pregnancy Discrimination Act of 1978. U.S. Equal Employment Opportunity Commission. Retrieved from https://www.eeoc.gov/statutes/pregnancy-discrimination-act-1978
Frankenfield J. (2019). Trade Secret. Business Essentials. Investopedia. Retrieved from https://www.investopedia.com/terms/t/trade-secret.asp
Greenwald (2016). Firing a Pregnant Employee. Termination Discipline and Performance Management.Greenwald Doherty Counsel for Employees. Retrieved from https://www.greenwaldllp.com/law-clips/firing-pregnant-employee/
Irish V. (n.d.).What an Employee Needs to Know about Trade Secrets. World Intellectual Property Organization. Retrieved from https://www.wipo.int/sme/en/documents/employees_confidentiality_fulltext.html
Lucas S. (2018). I Want to Fire My Employee, but She’s Pregnant. Is it legal to fire a pregnant employee?. Inc. Retrieved from https://www.inc.com/suzanne-lucas/i-want-to-fire-my-employee-but-shes-pregnant.html
NOLO (n.d.). Pregnancy Discrimination Lawsuits: What You Have to Prove. Sex Discrimination and Sexual Harassment. NOLO. Retrieved from https://www.nolo.com/legal-encyclopedia/pregnancy-discrimination-lawsuits-what-you-have-prove.html
Shaffer R.J. (2008). Making a Federal Case Out of Employee Theft of Trade Secrets. Fox Rothschild LLP Attorneys at Law. Retrieved from https://www.foxrothschild.com/publications/making-a-federal-case-out-of-employee-theft-of-trade-secrets/
Sheikh T. (n.d.).Trade Secrets and Employee Loyalty. World Intellectual Property Organization. Retrieved from https://www.wipo.int/sme/en/documents/trade_secrets_employee_loyalty.html
