Why does it seem to take so long to solve simple problems?  For years litigators have had to resort to the use of the cumbersome and needlessly expensive procedures to compel the attendance of a witness in interstate litigation pending in state court.  The problem arises, of course, where the testimony of a witness located in Pennsylvania is needed in connection with litigation pending in another state, or when the witness is located out of state and his testimony is needed in connection with a Pennsylvania case. 

In 2007, the National Conference of Commissioners on Uniform State Laws promulgated the Interstate Depositions and Discovery Act (the “Act”) which simplified the entire process.  In October 2012 the Act was adopted in Pennsylvania and became effective December 24. It is codified at 42 Pa.C.S. § 5331.

The Act requires the Prothonotary to issue a Pennsylvania subpoena, upon the submission of a foreign subpoena.  The Pennsylvania subpoena must incorporate the terms used in the foreign subpoena and provide the names and contact information for all counsel of record and unrepresented parties in the foreign proceeding.  Service and enforcement of the subpoena are governed by the Pennsylvania Rules of Civil Procedure. 

Need to subpoena a witness in another state for a Pennsylvania case?  If the witness is located in any of the thirty two states and territories that have adopted the Act, the procedure is just as simple.  Issue a Pennsylvania subpoena; send it to your local counsel on the ground in the discovery state and off you go.  The Act is the law in Alabama, Arizona, California, Colorado, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Mississippi, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, U.S. Virgin Islands, Utah, Vermont, Virginia, Washington.  It is on the legislative agenda in New Jersey.

That’s all there is to it! In the words of the Commission:

The Act requires minimal judicial oversight and eliminates the need for obtaining a commission or local counsel in the discovery state, letters rogatory, or the filing of a miscellaneous action during the discovery phase of litigation.  Discovery authorized by the subpoena is to comply with the rules of state in which it occurs.  Furthermore, motions to quash, enforce, or modify a subpoena issued pursuant to the Act shall be brought in and governed by the rules the discovery state.

The solution is so simple one wonders why it took so long to come up with it and, once the Act became available, why it took five years to enact it in Pennsylvania?  Enact it we have and litigators, their clients and the Courts will benefit from its simplicity.  

Employment agreements, especially those for key employees which include non-competition terms, must be carefully drafted.  What should they include?  Here are eight (what’s magic about ten?) musts: 

1. Define the Restrictions. The non-compete should, first and foremost, clearly define the prohibited zone by industry segment, by geography and by time. Because these covenants are disfavored in the law (certainly by every trial court which I’ve ever asked to enforce one of these agreements) employers must leave no doubt about the restrictions and be able to tie each to an identifiable protectable interest.  The covenants are not enforceable unless they are required to protect such interests, and then only to the extent the restrictions are reasonable. 
  
2. Protectable interest?  Courts will not enforce these covenants unless the employer has an interest which can only be protected by the restriction.  Eliminating competition is not a protectable interest but, for example, protecting customer relationships is. Consider how the particular employee could hurt your business and tailor the restrictions to provide protection in those areas.

3. Reasonable?  A covenant prohibiting competition anywhere in the country is not likely to be enforced where the employee’s relationships were confined to one state or region of the country.  Such a broad restriction would likely be found to be unreasonable.  Similarly, temporal restriction should be limited to the time required to give the employer’s new representative time to meet and solidify relationships with the customers. 

4. Don’t forget to protect your people.  A well drafted employment agreement will include provisions which prohibit the employee from inducing your employees to move to the new employer. Losing one key employee is bad enough; losing three or four may be catastrophic. 
 
5. What happens if the employer sells the business?  Unless the covenant can be assigned, it is lost and the employee is free to compete.  Restrictive covenants are important assets of the business.  Absent assignability, the value of those assets is lost if the business is sold.

6. A tolling provision?  It may take some time for an employer to learn that a former employee has violated the covenant.  Litigation to stop that violation takes more time.  A well drafted document will include a tolling provision which stops the clock from running while the employee is in breach. 
 
7. Protect confidential information.  The employment agreement should protect confidential information and trade secrets.  Employees are often privy to sensitive information which is necessary to do their job.  When they leave employment, that information should stay behind.  Make sure that the employment agreement provides that confidential information and trade secrets will not be “used or disclosed” after the sale.  Define confidential information as broadly as possible, but keep in mind that it does not include information known to the public or easily discoverable.

8. Make violation risky.  The former employee must know that if he chooses to violate, it will cost him.  The tolling language, mentioned above is one way to get that point across.  Another is to provide for recovery of attorney’s fees if the restrictive covenants are violated and enforcement litigation results.

There is a large body of state specific law surrounding the interpretation and enforcement of these agreements.  Make sure the attorney who you engage is experienced in this area of the law.

With summer just around the corner, employers are inundated with requests by students for summer internships. If your company offers such opportunities, taking a few moments to review the applicable regulations will help assure that the program complies with the law.

It goes without saying that a paid intern is an employee and subject to all applicable state and federal employment laws including those pertaining to minimum wage and overtime. Even if the internship is unpaid, failure to follow Department of Labor guidelines could lead to legal liability under the Fair Labor Standards Act.

Department of Labor Guidelines

The Fair Labor Standards Act (the FLSA) provides, of course, that individuals in an employment relationship must be paid for services performed. When is an unpaid intern an employee? According to guidelines published by the Department of Labor, if the following factors are met, there is no employment relationship and the intern need not be paid:

The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

The internship experience is for the benefit of the intern;

The intern does not displace regular employees, but works under close supervision of existing staff;

The employer that provides the training derives no immediate advantage from the activities of this intern;

The intern is not necessarily entitled to a job at the conclusion of the internship; and

The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of these factors are met, the Department of Labor will conclude that an employment relationship does not exist under the FLSA. In such circumstances, minimum wage and overtime provisions do not apply to the intern.

Different rules apply for governmental agencies and non-profit organizations. Internships offered by governmental agencies, private non-profit food banks and non-profit organizations providing religious, charitable, civic, or humanitarian services are generally permissible so long as the intern volunteers his or her time freely and without anticipation of compensation.

A permissible unpaid internship will include some or all of these features:

1. It is structured around a classroom experience as opposed to the employer’s actual operations;
2. Academic credit is offered by a sponsoring institution;
3. The internship provides the intern with skills that can be used in multiple employment settings as opposed to specific training in the employer’s operations;
4. The intern does not perform the routine work of the employer;
5. The employer is not dependent upon the work of the intern;
6. Job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work.
7. The internship is of a fixed duration established at the outset of the internship.

Factors which indicate an employment relationship (and trigger the requirement to pay wages) include:

1. The intern is engaged in the operations of the employer;
2. The intern is performing productive work such as, for example, filing, clerical work or assisting customers;
3. The employer uses interns in lieu of hiring additional employees or offering more hours to existing employees;
4. The intern receives the same level of supervision as other employees;
5. The intern is offered employment to begin immediately upon the conclusion of the internship, effectively transforming the “internship” into a trial period of employment.

Summer internships, paid or unpaid, provide valuable experience to students. Employers need only exercise some caution is structuring the internship to avoid running afoul of DOL regulations. The DOL Fact Sheet on summer internships is available at http://www.dol.gov/whd/regs/compliance/whdfs71.htm