At one point or another, nearly all businesses will be forced to deal with issues such as theft, workplace violence or drug use by employees, or damaging post-employment conduct such as the pirating of customers and/or employees, or unauthorized disclosure or use of company confidential information by former employees. Fortunately, there are effective measures available to employers to proactively combat these common forms of employee misconduct.
Hiring Due Diligence - Background and Reference Checks
Many employment related problems can be avoided altogether by obtaining meaningful information at the application stage through appropriate background and reference checks. Information relating to an applicant's job and performance history, criminal background, and credit history, as well as information provided by personal references, is crucial in evaluating the suitability of a candidate for employment. Often, employers neglect to obtain this information because of a perception that it is difficult to collect or because of a fear of liability. Fortunately, obtaining this information is easier and less risky than you think. For example, Maryland law provides that employers are immune from civil liability for communicating information concerning job performance or reason for termination as long as the employer is acting in good faith. Other information, including background, credit and criminal information, can be obtained from an outside service for a fee. Employers are well advised to obtain this information prior to making any hiring decision; however, a written waiver and authorization (which can be inserted in any application form) should be obtained from the employee prior to collecting the information. Similarly, employers should take care to comply with all applicable state and federal law governing use of such information, including the Fair Credit Reporting Act.
Drug Testing
Drug testing is a very effective way to protect the workplace from the dangers associated with drug abuse. Instituting a drug testing program for applicants and employees both deters drug abusers from joining the organization, and discourages employees from reporting to work under the influence and creating a safety hazard. Currently, there are no prohibitions under state or federal law regarding private sector drug testing; however, some testing practices, such as random testing, may pose a slightly greater legal risk than reasonable cause or post accident testing. Employers should seek qualified counsel prior to implementing a drug-testing program. Wage Deduction and Offset Authorization One of the more frequent issues we encounter involves whether the employer has the right to offset against an employee's final paycheck when the employee owes the company money, or refuses to return valuable company property (such as a computer). Unfortunately, under Maryland law, an employer may not offset against earned compensation in this situation without written advance authorization from the employee. In fact, the employer is potentially liable for "treble" damages (3 times the amount wrongfully withheld) for violating this particular statute. Employers can avoid this problem altogether by requiring all employees to execute an appropriate wage deduction and authorization form as a condition of employment or continued employment.
Confidentiality and Non-Compete Agreements
Employers expend considerable time and expense developing their products, cultivating customers and training employees. Employers also have a substantial interest in restricting the disclosure and use of their trade secrets and other confidential and proprietary information. Many of our clients have therefore required employees to execute agreements containing certain "restrictive covenants" prohibiting certain employment and post-employment activities. Employers should be aware that, with the exception of information rising to the level of a trade secret (a fairly rigorous standard), former employees are generally free to use and disclose company confidential information, and pirate employees and customers with impunity unless they have contractually agreed to restrict their post-employment activities. Properly drafted, agreements containing "restrictive covenants" curtailing the use and/or disclosure of confidential information, and containing reason of the restrictions on competition and/or customer/employee solicitation are fully enforceable under Maryland law.