法律英语：10 Conflict of Interest

by Michael W. Flynn
 
First, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed¹ to practice in your jurisdiction².

Further, I do not intend to create an attorney-client relationship with any listener.

Before I begin, I would like to welcome the newest member of the Quick and Dirty Tips podcasting family: Sales Guy’s Quick and Dirty Tips for Getting the Deal Done, hosted by Jeb Blount. Every week, Jeb gives great tips on how to close the deal and increase productivity in the sales industry. Check him out today at his website: sales.quickanddirtytips.com. 

 

Today is the third in employment discrimination series, and focuses on an interesting question I received from a listener who identified him/herself as “Concerned Employee”:

 

My employer recently had all employees sign a Conflict of Interest form wherein employees are informed they must inform Human Resources before forming any outside business.  If I am forming an outside business that in no way competes and/or conflicts with my existing employer is it legal for them to force disclosure of what business I operate on my personal time?

 

The short answer is that this type of disclosure requirement probably violates public policy on the ground that it is an unnecessary violation³ of your privacy, and it might lack necessary consideration. 

 

The general rule in employment law is that an employer may place any condition on employment so long as it does not violate a statute⁴, such as Title VII from the last episode, or public policy. Most courts have held that it violates public policy for an employer to inquire into your personal life unless the questions are related to your job performance. An employer cannot force you to tell it how often you have sex, or what companies you have investments in, or what your favorite television show is. So, the requirement to disclose ALL outside business seems at first blush to go too far. 

 

Further, contracts in restraint of trade, made independently of a sale of a business or contract of employment, are also void as against public policy. The employer cannot force you not to take on other jobs, or not to sell something you make where the other job or the goods you are selling are wholly unrelated to the employer. For example, if you work for a plumbing⁵ company, the company cannot enforce a wholesale⁶ ban on your ability to teach piano lessons on the side. 

 

But, many noncompetition clauses are generally enforceable against employees, subject to exceptions of course. If an employee signs a noncompetition clause when they are hired, promise not to compete within geographic⁷ limitations and for a measurable amount of time, then that clause is enforceable. So, a clause prohibiting the plumber⁸ from servicing former clients within a 50-mile radius⁹ for two years is likely enforceable. 

 

If an employee is forced to sign a noncompetition clause while already employed, the clause’s enforceability will generally turn on whether the employee is at-will, or subject to a contract. An at-will employment relationship is one in which either party can terminate the relationship with no liability provided there was no express contract for a definite term governing the employment relationship. If the employee is subject to an employment contract, then the terms of the contract will generally control. That is, if the contract states that your employer reserves the right to force you to enter into a noncompetition clause, then you are likely bound by it. 

 

However, if you are an at-will employee, courts are split. Some courts have held that there must be some additional consideration, or value, offered to you in exchange for signing the clause. So, an Oregon court stated that, by being promoted to a higher management level, the noncompetition clause that was required was supported by the extra pay and responsibilities. By contrast, an Arizona court held that the simple offer of continued employment was sufficient to render the clause enforceable. The court reasoned that the employee was at-will, and could be fired at any time. So, the “offer” to continue paying the employee was sufficient consideration for the employee to sign the noncompetition clause. 

 

The last consideration that might come into play would be trade secrets. A trade secret is a formula, practice, process, design, or compilation¹⁰ of information which is not generally known or reasonably ascertainable¹¹, by which a business can obtain an economic advantage over competitors or customers. A company always has the right to keep you quiet with regard to its trade secrets. So, Google can restrict its employees from divulging¹² secret algorithms and can prohibit former employees from using knowledge of those algorithms in other employment. 

 

With these principles in mind, it appears that Concerned Employee cannot be forced to sign the disclosure statement, and even if he or she does, the clause is not likely enforceable. First, it forces the employee to volunteer personal information unrelated to the business. Second, even if the clause were tailored to only require disclosure of businesses related to current employment, some courts would hold the clause unenforceable because there is no additional consideration. Third, a wholesale ban on other employment is not likely narrowly tailored enough to be considered a protection on trade secrets.   

 

Thank you for listening to Legal Lad’s Quick and Dirty Tips for a More Lawful¹³ Life.  Be sure to check out the Sales Guy’s Quick and Dirty Tips for Getting the Deal.

 

You can send questions and comments to。。。or call them in to the voicemail line at 206-202-4LAW.  Please note that doing so will not create an attorney-client relationship and will be used for the purposes of this podcast only.

 

1 licensed   

adj.得到许可的v.许可，颁发执照(license的过去式和过去分词)

参考例句：

• The new drug has not yet been licensed in the US. 这种新药尚未在美国获得许可。
• Is that gun licensed? 那支枪有持枪执照吗？

2 jurisdiction   

n.司法权，审判权，管辖权，控制权

参考例句：

• It doesn't lie within my jurisdiction to set you free.我无权将你释放。
• Changzhou is under the jurisdiction of Jiangsu Province.常州隶属江苏省。

3 violation   

n.违反(行为)，违背(行为)，侵犯

参考例句：

• He roared that was a violation of the rules.他大声说，那是违反规则的。
• He was fined 200 dollars for violation of traffic regulation.他因违反交通规则被罚款200美元。

4 statute   

n.成文法，法令，法规；章程，规则，条例

参考例句：

• Protection for the consumer is laid down by statute.保障消费者利益已在法令里作了规定。
• The next section will consider this environmental statute in detail.下一部分将详细论述环境法令的问题。

5 plumbing   

n.水管装置；水暖工的工作；管道工程v.用铅锤测量（plumb的现在分词）；探究

参考例句：

• She spent her life plumbing the mysteries of the human psyche. 她毕生探索人类心灵的奥秘。
• They're going to have to put in new plumbing. 他们将需要安装新的水管。 来自《简明英汉词典》

6 wholesale   

n.批发；adv.以批发方式；vt.批发，成批出售

参考例句：

• The retail dealer buys at wholesale and sells at retail.零售商批发购进货物，以零售价卖出。
• Such shoes usually wholesale for much less.这种鞋批发出售通常要便宜得多。

7 geographic   

adj.地理学的，地理的

参考例句：

• The city's success owes much to its geographic position. 这座城市的成功很大程度上归功于它的地理位置。 来自《简明英汉词典》
• Environmental problems pay no heed to these geographic lines. 环境问题并不理会这些地理界限。 来自英汉非文学 - 环境法 - 环境法

8 plumber   

n.(装修水管的)管子工

参考例句：

• Have you asked the plumber to come and look at the leaking pipe?你叫管道工来检查漏水的管子了吗？
• The plumber screwed up the tap by means of a spanner.管子工用板手把龙头旋紧。

9 radius   

n.半径，半径范围；有效航程，范围，界限

参考例句：

• He has visited every shop within a radius of two miles.周围两英里以内的店铺他都去过。
• We are measuring the radius of the circle.我们正在测量圆的半径。

10 compilation   

n.编译，编辑

参考例句：

• One of the first steps taken was the compilation of a report.首先采取的步骤之一是写一份报告。
• The compilation of such diagrams,is of lasting value for astronomy.绘制这样的图对天文学有永恒的价值。

11 ascertainable   

adj.可确定（探知），可发现的

参考例句：

• Is the exact value of the missing jewels ascertainable? 那些不知去向之珠宝的确切价值弄得清楚吗？ 来自辞典例句
• Even a schoolboy's jape is supposed to have some ascertainable point. 即使一个小男生的戏言也可能有一些真义。 来自互联网

12 divulging   

v.吐露，泄露( divulge的现在分词 )

参考例句：

• The soldier was shot for divulging the plans to the enemy. 这个士兵因向敌人泄密被击毙。 来自互联网
• Gives itself a small seat. Divulging heartily. 给自己一个小位子。尽情的宣泄。 来自互联网

13 lawful   

adj.法律许可的，守法的，合法的

参考例句：

• It is not lawful to park in front of a hydrant.在消火栓前停车是不合法的。
• We don't recognised him to be the lawful heir.我们不承认他为合法继承人。