Non-Competes and Office Romances

Over the holiday, the Court of Appeals issued a couple of employment-related decisions regarding situations that often come up.

  1. Non-Compete Agreements/Competition with Former Employer

In Curry’s Transportation Services, Inc. v. Dotson et al., the Court of Appeals addressed the enforceability of a non-compete and competition with a former employee.  Since I want to address two cases in this post, I’m going to give the cliff notes rather than dissect the whole case.

  •  Non-compete agreements are unenforceable if they are unnecessary to protect the business interest.  CTS’s information did not require protection.  Its customers were not confidential.  It priced its service the exact same way all trucking companies price its service—rates were generally standardized across the industry.  Business in the trucking industry is not dependent upon personal contacts and relationships or confidential information.  CTS did not require most of its drivers to sign non-competes and/or confidentiality clauses.  All these facts together led the court to find that the non-compete was unenforceable.  Again, it was all the facts that led to the conclusion.  Simply requiring employees to sign a non-compete will not make it enforceable.  There must be a legitimate business interest that needs to be protected.
  • Preparation to form a competing business is generally lawful unless an individualized harm to the former business beyond additional competition results from the preparation. 

       2.   The Office Romance

 In Roche v. Davenport Cleaners et al., the facts circled around a volatile romantic relationship between two co-workers that led to the termination of the female co-worker.  Both employees engaged in derogatory speech towards each other, finally resulting in a physical altercation initiated by the female co-worker.  After termination, the female co-worker filed a sexual harassment and retaliation suit against the employer.  The employer was found not liable because the court determined that the female co-worker engaged in the name-calling and harassment and that the conduct was based on the relationship between the parties, not because the plaintiff was a female.  Let’s see what steps can be taken to prevent this expensive lawsuit.

  •  Determine if you will prohibit or limit romantic relationships between co-workers.  Will you prohibit all romantic relationships?  Will you transfer those involved in romantic relationships to different departments?  Once you’ve determined if a policy is necessary, put it in writing, distribute it to your employees and train your employees.
  • Respond appropriately to harassment/misconduct in the workplace.  Davenport Cleaners knew what was happening in the workplace.  It was aware of the name-calling between the two individuals.  From the facts presented in this case, it appears that Davenport Cleaners did little to prevent/rectify the situation.  When complaints are made (even if the employee does not “want to get the harasser in trouble”) take action.  Investigate and discipline when necessary and as appropriate.  Don’t let the problems get out of hand.

Happy New Year!

Conducting an Investigation

An employee just made a complaint of harassment or discrimination. You know you have a duty, as the employer, to investigate the employee’s complaint, but aren’t entirely sure how to conduct the investigation. Here are a few tips:

1. Understand the complaint. Take time to listen to the employee’s complaint. Understand what the employee is telling you by asking open-ended questions. Tell the employee that you are glad they brought the problem to your attention and you intend to act upon the complaint. Consider whether the complaint, if true, violates the law or company policies. Complaints that violate the law or company policies need to be investigated further.

2. Take Action. Determine if immediate action needs to be taken based on the complaint. Is the allegation serious enough to warrant a suspension or leave of absence for the harasser during the investigation? Are there documents that need to be preserved immediately? Are there computers or computer records that need to be preserved?

3. Determine who will conduct the investigation. If possible, the investigator should be someone outside the chain of command for the complaining employee. In some situations an outside investigator may be necessary. Limit the number of people involved in the investigation.

4. Plan the investigation. Take time to map out your investigation. Who needs to be interviewed? Where will the interview take place? What questions need to be answered? What documents need to be reviewed? Create an investigation log to record every step you take during the investigation.

5. Conduct interviews. If possible, being the interview process with the complainant. Ask open-ended questions, then more specific questions. Delve into inconsistencies, weaknesses, or contradictions.

6. Update and revise your plan based on the interviews. Continue requesting documents based on the interviews.

7. Make a conclusion. The point of the process is to determine if action needs to be taken based on the complaint and what action needs to be taken. Assess credibility. Review notes and storylines. Find facts that support your conclusion.

8. Follow-up with the complainant. Regardless of your conclusion, discuss the conclusion at some level with the complainant.

An investigation can provide an employer with a good defense if litigation ensues. But more than that, it tells employees that you take complaints serious and you want to keep your workplace free from harassment and discrimination.

US Supreme Court to Decide Who is a "Supervisor"

Late last month, the U.S. Supreme Court agreed to hear argument in Vance v. Ball State University. The facts of the case are not novel. Vance, an African-American, alleged that certain supervisors and co-workers discriminated against and harassed her based on her race. In one short paragraph, the Seventh Circuit determined that one of the purported supervisors was not a supervisor because that individual did not have the power to hire, fire, demote, promote, transfer or discipline Vance. It then moved on to deal with the remaining individuals and claims. 

It is that short paragraph from which the issue arises. That being, whether "supervisor" liability under Title VII applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work or is limited to those who have the power to "hire, fire, demote, promote, transfer, or discipline" their victim. The distinction is important because under Title VII employers are strictly liable for harassment perpetrated by "supervisors". Alternatively, employers are liable for harassment perpetrated by co-workers only if the employer was negligent in discovering or remedying the alleged harassment. Roughly, an employer who takes preventative and corrective steps can avoid liability in co-worker harassment situations but not in supervisor harassment situations. 


The Eighth Circuit, of which Iowa is a part, agrees with the Seventh Circuit--only those who have the power to hire, fire, demote, promote, transfer, or discipline are supervisors. Therefore, if the Supreme Court agrees with the Seventh Circuit not much will change with respect to how cases are decided in our jurisdiction. If, however, the Supreme Court decides that supervisors include those who direct and oversee daily work employers in Iowa will be open to increased risk in harassment lawsuits. 


Oral argument in this case should occur in the Fall, with an opinion sometime after that.

Bullies in the Workplace

When does bullying behavior in the workplace rise to an actionable level? This question was considered by the Iowa Court of Appeals in Wilson v. Cintas Corp No. 2 released Wednesday, December 17, 2008.

The facts indicate that Wilson was daily subjected to a “constant barrage of personal attacks, insults, and vile profanity” by his co-worker Mills. (The conduct occurred for approximately 5-10 minutes each day). The specific insults are too vulgar to repeat, but can be found in the opinion. It was also brought out that both employees were involved in the insults and profanity. Wilson did report the conduct to his supervisors. Apparently the employer took some action because Mills was terminated in December because he had four occurrences of shouting inappropriate language and not maintaining a level of professionalism. Later Wilson terminated his employment for reasons unrelated to Mills’ conduct.


The opinion tells us that “outrageous conduct” is the standard for maintaining an action against a co-worker for this type of conduct. Outrageous conduct “is so extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.”  It should extract an exclamation of outrage from and instill resentment in the average member of the community. Mills’ behavior was considered “inconsiderate, unkind, and offensive” but was not outrageous conduct according to the court.


The court contrasted Mills’ behavior with the behavior of a supervisor in Blong v. Snyder, 361 N.W.2d 312 (Iowa Ct. App. 1984). In that case a discharged employee who was reinstated after filing a grievance was falsely “accused of stealing, wasting time, intentionally breaking his machine, intentionally producing inferior parts, violating fifteen company rules, playing with himself in the restroom, given extra work without receiving the proper tools to do the job and was then berated, threatened, and disciplined for his inability to properly complete the task.”

It’s apparent from the comparison between these two cases that the court will not get involved in personality conflicts but will step in when offensive conduct rises to a level that is unconscionable.