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PHRA July 14.Crtr JULY 2014 — PHRA — 1 EMPLOYEES MUST RECEIVE COMPENSATION FOR SIGNING NON-COMPETES Most employers ask some or all of their employees to sign non-compete agreements to prevent them from leveraging the knowledge and connections gained during the course of their employment to get a job with a competitor. Although many employers may not realize it, Pennsylvania law dictates that employers always must offer employees some type of valuable compensation in exchange for signing a non-compete agreement. Without compensation, the company will be unable to enforce the agreement in Pennsylvania courts. It’s a common misconception that employers can get around the compen- sation rule by making sure that the non-compete agreement says that both employee and employer “intend to be legally bound” by the document. The belief comes from Pennsylvania’s Uniform Written Obligations Act (UWOA), which states that any contract is valid, even if no payment or other benefits have been exchanged, as long as the contract states that both parties intend to be legally bound by it. But a recent ruling by the Pennsylvania Superior Court forcefully dispelled that misconception, making it clear that the rule to give employees compen- sation for signing non-compete agreements trumps the UWOA. In the case, a company hired a salesman who had worked for it previously. Upon accepting employment, the company asked him to sign a non-compete agreement that restricted him from working for a competitor for two years after leaving the company. Later, the company asked the salesman to sign another agreement that further restricted him from working for competitors in several states, including Pennsylvania. The salesman was given no extra compen- sation or consideration for signing the non-compete agreement. When the salesmen took a job with a competitor in Pennsylvania, his for- mer employer threatened legal action against the new employer, which fired the salesman. The salesman then sued his former employer, claiming that his non-compete agreement was invalid because the company didn’t compen- sate him for signing it. The company argued that despite the lack of compen- sation, the contract was legally binding under the UWOA. The Pennsylvania Superior Court ruled in favor of the salesman, noting that non-compete agreements “have always been disfavored in Pennsylvania.” The UWOA does not relieve employers of their obligation to compensate employees for signing non-compete agreements. For new employees, the job itself is acceptable compensation. But for existing employees, employers must offer some other benefit, such as a bonus or promotion. Courts do not con- sider “continued employment” to be acceptable compensation. The ruling serves as a warning to all employers of the difficulty of enforcing non-compete agreements in Pennsylvania. Employers should review their non-compete agreements and administration policies to make sure that the agreements are enforceable in court. Beth Slagle, Meyer, Unkovic & Scott 2 — PHRA — JULY 2014 The Premier Human Resources of Association In The Region Rex Gatto, Ph. D., President, PHRA To hear the July President’s Message go to the PHRA’s Rex Gatto. Ph. D YouTube Channel at http://youtu.be/PuZRXN-kADc Follow the PHRA on Twitter, LinkedIn, Facebook and Hope Vaccaro, PHR YouTube. Jeff Cermak Mary Kohler, SPHR Dear PHRA Members, Steve Korbel, Esq. The SHRM Certified Professional (SHRM-CP) and SHRM Senior Certified Ron Kubitz Professional (SHRM-SCP) was unveiled by SHRM’s CEO Hank Jackson. This new certification will be based on the competencies SHRM feels are Katherine Lebeck, PHR necessary to be an effective HR professional. SHRM is still in the process of establishing a governance body which will Tamiko Stanley be called the SHRM Certification Commission that will serve as a technical advisory committee and will be an appendage of the SHRM Board. Mike Toney, SPHR - Many members and volunteer leaders were surprised by the announce ment of a new certification by SHRM. This has been especially problematic Kristen Bell, SPHR (2014) since most HR professionals viewed SHRM and HRCI as one organization. Godfrey Bethea, PHR (2015) Columbus Brooks (2015) The HRCI certifications will still be valuable regardless of SHRM’s move; - Kristina Conner SPHR (2016) 130,000 certified professionals won’t simply walk away from a respected cre Daniel Corkum PHR (2016) dential that they fought hard to obtain. Carrie Dean, PHR (2015) For those trying to decide whether to go ahead and take the HRCI exam Jeff Dressler (2016) now, or wait for SHRM, I encourage you to move forward and sit for the Frank Duzicky SPHR (2016) Mary Grasha-Houpt, SPHR (2014) HRCI exam. Never delay your own professional development. For those - Monica Lorish (2015) worried about recertification, professional development completed for recer Janet Manuel, PHR (2014) tification under HRCI will count towards recertification under SHRM’s new Pamela Nelson-Minteer, SPHR (2015) credential as well. Melissa Morgan (2016) What does this mean for certified members or for those interested in Becky Vinton SPHR (2016) becoming certified this year? SHRM is committed to supporting current and future 2014 users of the Alexis McConville - Chair Learning System. Effective July 1, 2014, online access issued to students will change to a 12 month timeframe under which their online access will be Kori Amos, PHR - Chair available. SHRM will support the current online portion of the Learning Patrick Bendel - Chair System through the 2015 winter test window. For those students who participate in a PHR/SPHR class this fall and do Tracey McIntyre-Holst, SPHR - Chair not pass their exam in the upcoming December/January testing window, SHRM will provide the new 2015 SHRM Learning System for the new SHRM Mylene Zupan, SPHR - Chair certification free of charge in preparation for the new certification. - Beginning January 1, 2015, students who have already earned their certifi - Elizabeth Lamping cation will be eligible for SHRM’s new certification - at no cost - by complet ing the following by December 31, 2015: Deven K. Snyder 1. Document that their current certification is in good standing; 2. Sign the SHRM Code of Ethics; Mike Chiapetta, Michael Couch, Jaime Gannon, 3. Complete an online educational module and brief online tutorial on HR Phyllis Hartman, Tracey Holst, Nicole Howard, competencies. Once they go through this process, they will receive the new Kristine Irwin, Liz Lamping, Beth Slagle, SHRM credential and will begin a three-year recertification cycle. Shannon Snow In 2015, PHRA will become an approved provider for the SHRM Certified Perspectives is the official publication of the Pittsburgh Professional (SHRM-CP) and SHRM Senior Certified Professional (SHRM- Human Resources Association and is published bimonthly by SCP) as well as maintain our valued approved provider status through HRCI. the Editor. Articles for inclusion, inquires or comments can be - mailed to Jay Lear, Editor, c/o One Gateway Center, 420 Fort As more information becomes available from SHRM and HRCI, HR profes Duquesne BLVd, Suite 1852, Pittsburgh, PA 15222 or [email protected]. Please direct advertising sionals can decide on their best credential path forward. PHRA will continue inquiries to [email protected]. Any documents to be prepared to support your recertification options regardless of the path submitted become the property of PHRA. you select. The ideas expressed are those of the individual writers, not the members of board of directors of the Regards, Pittsburgh Human Resources Association, and should not be viewed as legal advice. Elizabeth Lamping JULY 2014 — PHRA — 3 To a company, all of my manufac- the start of the process - factors that turing clients are having difficulty find- often have little relationship to future ing enough skilled technical talent to performance and potential (like the support their business needs. Is this a GPA example cited above). One of curse of today’s labor market and the biggest culprits is over-emphasiz- education gaps? Very likely, even ing technical knowledge that can be though we are experiencing high learned in a short period in the new unemployment. However, I believe job. The first steps in the screening poorly designed and administered process (i.e., Monster screening selection processes are a significant questions, resume reviews, or tele- contributing factor. phone screens) should screen-in on Here are some actual examples broad capabilities such as the ability that suggest why this is the case: to learn, ability to achieve results, • A client spent months going experience on teams, or experience through 27 candidates to find a single managing others and eschew narrow “qualified” programmer analyst that technical skills. ended up being just an average per- Selection is a Process and a former. Upon investigation, one man- Project ager (a low performer) screened out Just like other projects that occur in most of the candidates. In addition, process stages (i.e., product devel- completing the interview process with opment), selection tasks should be a single candidate often took several planned concurrently, should have weeks. clear milestones with reviews and • A large manufacturer felt that they measures, and require coordinating were not getting enough qualified the work of multiple contributors. candidates from their college recruit- Recruiters must be effective project ing. It turned out that the factor that managers, able to manage multiple screened out most candidates was projects simultaneously. GPA when there is no relationship If you haven’t done a process flow between GPA and job performance. of your recruiting and selection proc- Word was out on campus to not even ess, that’s a great place to start. Get sign up for an interview if your GPA all the players in a room and layout wasn’t high. the process from approval to 90-day • A company was losing their top anniversary. Gather measures of candidates before they could make time and effectiveness.
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