In This Issue

• Don't Let Your Trade Secret Horse Out of the Barn …
• Legal Challenges to New Workers' Compensation Law Defeated — Finally!
• Supreme Court Issues Final Word on Unauthorized Practice of Law and Workers' Compensation
• Questioning Employees and the ADA

Don't Let Your Trade Secret Horse Out of the Barn …

By Lawrence F. Feheley

In today's business environment, employees frequently leave and go to work for competitors. When that happens, employers worry that their confidential information and trade secrets may become compromised or, even worse, used by their competitors. Legal protection for confidential information is available, but only if the company can prove that it has taken reasonable steps to maintain the confidentiality of the information. Unless the information has been protected and actively treated as confidential, legal protection may very well be lost. Don't wait until it's too late to take steps to protect your confidential and trade secret information.

Some of the precautions you might want to consider to protect valued information include the following:

1. Culture – You should cultivate an environment where it is continuously stressed, and reinforced, that maintaining the confidentiality of important, proprietary information is critical to the success of the business. This message should be spelled out in Employee Handbooks and underscored in employee orientation and training.

2. Policies Directed Toward Confidentiality – Your Employee Handbook should have a specific provision that outlines confidentiality expectations. In addition to the confidentiality statements in your Handbooks, other policies should complement the confidentiality objective. For example, policies that employees should not reveal their computer passwords to others should be stressed.

3. Identification – Documents and records that are confidential should routinely and uniformly be stamped with a conspicuous legend that reads "CONFIDENTIAL." All such documents should be physically maintained in separate files, with restricted access. Computer-generated documents should carry the same legend, and should be protected from general access, perhaps by the requirement for a second-level, restricted password. Prohibitions on e-mailing or downloading internal records should be articulated.

4. Confidentiality Agreements – Every employee who has access to confidential information should be required to sign a separate agreement that prohibits the use or disclosure of the information, during or after employment. By the same token, visitors, potential buyers, consultants and any other person outside the Company who will gain access to confidential information should be required to sign a similar agreement.

5. Restrict Access – Critical to the protection of confidential information is a working policy that restricts access to those on a "need to know" basis. This restriction should apply both to records and physical access to sensitive working areas of the Company. Some companies implement tracking systems that catalog access to records, as well as retrieval, storage and destruction.

6. Reminders – Whenever an employee who has had access to confidential information leaves the Company, they should be formally reminded of their legal obligation not to use or disclose the information, as well as the Company's firm resolve to protect its legal rights.

Measures such as these not only protect your confidential information from disclosure, but they may be absolutely critically if you find the need to ask a court to enjoin and protect your confidential information from unfair use.

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Legal Challenges to New Workers' Compensation Law Defeated — Finally!

By David M. McCarty

Just two weeks before the November 7 election, the Ohio Supreme Court rejected a last-ditch effort by organized labor to undue major provisions of a sweeping workers' compensation reform bill.

The new workers' compensation law, Senate Bill 7, was signed by Governor Taft in March and was due to become effective in late June. However, the United Auto Workers Union mounted an effort to place an issue on the November ballot that, if passed, would have removed significant portions of the law. Interestingly, and perhaps not surprisingly, the UAW sought to invalidate only those provisions, agreed to by representatives for the injured workers, Ohio employers and the Bureau of Workers' Compensation, that were deemed unfavorable to injured workers. Therefore, if the UAW's effort had been successful, the employee-friendly provisions agreed to by representatives for Ohio employers, as a compromise to obtain concessions from the claimants' bar, would have remained in the law while the rest would have been thrown out.

The Secretary of State provisionally accepted petition signatures submitted by the UAW and placed the referendum effort on the November ballot as Issue 1. However, upon investigation, the Secretary of State concluded that not enough valid signatures were submitted to get the issue on the ballot. The UAW contested the Secretary of State's decision and initially obtained an injunction from the Franklin County Court of Common Pleas preventing the Secretary of State from removing Issue 1 from the ballot. The injunction was eventually lifted and subsequent appeals to the Franklin County Court of Appeals and Ohio Supreme Court were rejected. At last, the Bureau of Workers' Compensation and Ohio employers can implement the new provisions in their workers' compensation program.

Following is a list of some of the new provisions:

1. Requires a "substantial" aggravation of a pre-existing injury, rather than merely a "symptomatic" aggravation, for a claim to be compensable. Also allows termination of benefits once the pre-existing condition returns to pre-injury status.

2. Reduces the "life" of all claims to five years rather than the current six year (medical only) and ten year (lost time) "statutes of repose".

3. Reduces the 40-week waiting period for the filing of a permanent partial application to 26 weeks.

4. Reduces the number of available weeks of non-working wage loss compensation from 200 to 52.

5. Increases the Bureau's $1,000 medical only claim program to $5,000.

6. Expands anti-fraud provisions, primarily against employers and providers.

7. Permits penalties against self-insuring employers for failure to timely pay assessments.

8. Makes rape or sexual assault a compensable claim whether or not the victim suffers any physical injuries.

9. Clarifies and limits entitlement to statutory permanent total disability compensation.

10. Eliminates a claimant's right to dismiss an employer's court appeal without the employer's consent.

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Supreme Court Issues Final Word on Unauthorized Practice of Law and Workers' Compensation

By Randall W. Mikes

On December 6, 2006, the Ohio Supreme Court issued its decision in Cleveland Bar Assn. v. CompManagement, Inc. (2006), 111 Ohio St. 3d 444, 2006-Ohio-6108, concluding over four years of litigation regarding claims that CompManagement ("CMI"), a workers' compensation third party administrator, committed the unauthorized practice of law in its management of the workers' compensation claims of its customers.

In April 2002, the Cleveland Bar Association filed a complaint against CMI claiming that it and several of its employees engaged in the unauthorized practice of law relative to the representation of employers at hearings and in performance of certain administrative tasks. On May 18, 2004, the Board on the Unauthorized Practice of Law ("Board") released its decision finding that CMI committed the unauthorized practice of law relative to a number of administrative tasks representing most of the services offered by a third party administrator ("TPA").

The Industrial Commission quickly responded to the Board's decision by issuing Resolution R04-1-01, in which it identified the functions which non-lawyers could and could not perform relative to the administration of workers' compensation claims. A copy of the Resolution is available at http://www.ic.state.oh.us/resolutions/r4101.html.

Subsequently, in Cleveland Bar Assn. v. CompManagement, Inc. (2004), 104 Ohio St.3d 168, the Court held that "non-lawyers who appear and practice in a representative capacity before the Industrial Commission and Bureau of Workers' Compensation in conformity to Industrial Commission Resolution No. R04-1-01 are not engaged in the unauthorized practice of law." The Court then remanded the case to the Board to determine whether CMI and its hearing representative committed the unauthorized practice of law in light of the Commission's resolution.

On January 24, 2006, the Board issued its Amended Final Report upon Remand in which it found that certain activities continue to represent the unauthorized practice in the context of the Court's holding, specifically: negotiation and involvement with settling claims; direct and indirect examination, including cross-examination, of witnesses during hearings; presentation of employer concerns, arguments, summations of evidence, conclusions regarding the import of factual information and/or closing statements on behalf of employers during hearings; recommendation and advice to employers as to taking appeals and other legal action; and, evaluation, advice or recommendation concerning whether an employer should retain an attorney to handle a claim before the Industrial Commission.

The matter again came before the Court on CMI's objections to the Board's Final Report. In its decision issued December 6, the Court first held that "[a]n allegation of the unauthorized practice of law must be supported by either an admission or other evidence of the specific act or acts upon which the allegation is based." The Court proceeded to find that the allegations against CMI were either not supported by such specific evidence or did not represent the unauthorized practice in the first place. With regard to the Board's specific findings:

• Settlement:  A TPA "may make actuarial determinations regarding settlement, act as a messenger for the employer in regard to settlement, and file settlement applications without conducting the unauthorized practice of law, as these activities do not require the specialized training and skill of an attorney."

• Examination of witnesses:  A TPA "who has not asked a question of the witness has not conducted an 'examination' of the witness and, thus, has not engaged in the practice of law. A [TPA] may properly communicate the employer's areas of concern to the hearing officer, who may then ask questions of the witness."

• Presentation of employer concerns and other hearing room issues:  A TPA may express employer generated concerns, present facts and documents relevant to those concerns and request a final outcome in summation so long as this is done without legal argument or analysis.

• Recommendation of appeal/other legal action:  A TPA may recommend appeal based upon claim cost considerations but not upon whether the appeal is legally supported. The Court found no evidence of specific conduct whereby CMI's recommendations represented legal analysis.

• Recommendation to retain legal counsel:  A TPA may determine and recommend that an employer retain legal counsel.

The Commission's Resolution is now conclusively established as the standard for non-lawyer representation in workers' compensation matters. TPAs may continue to act in accordance with the Resolution much as they have for the last two years.

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Questioning Employees and the ADA

By Brendan P. Feheley

Most employers have become familiar with the Americans with Disabilities Act and the requirement to reasonably accommodate an employee with a disability, however, since the enactment of the Americans With Disabilities Act in 1990, employers have faced the dilemma of what, if any, questions they may ask about their employees' health, including disabilities the employee may have. These types of questions are called "disability-related inquiries." A "disability-related inquiry" is a question that is likely to elicit information about a disability. The broad definition of disability related inquiry has left many employers confused about what types of questions are permissible, and when. Obviously, questions about whether the employee currently has or has ever had a disability are disability related questions. More surprisingly, questions about the kinds of prescription medications the employee is taking or the results of any genetic tests they have had are also considered disability related inquiries.

The Equal Employment Opportunity Commission has issued guidelines to help with the uncertainty surrounding disability-related questions. The guidelines break the employment relationship into three stages (pre-offer, post-offer and after employment begins). At the first stage (pre-offer), an employer may not ask any disability-related questions or require any medical examinations, even if they are related to the job. At the second stage (post offer, after an applicant is given a conditional job offer, but before he or she starts work), an employer may ask disability-related questions and conduct medical examinations, regardless of whether they are related to the job, as long as it does so for all entering employees in the same job category.

Interpreting the guidance as it relates to the first two prongs, employers must wait to conduct medical examinations or ask disability related questions until after the employee has been conditionally offered the position. Employers who have jobs which require certain skills (ability to lift a certain amount, ability to see a certain distance, ability to flex or bend a limb, etc…) should conduct medical examinations and ask questions related to these requirements of all applicants that have been offered a position. These inquiries or examinations should occur prior to the employee beginning work.

At the third stage (after employment begins), an employer may make disability-related inquiries and require medical examinations only if they are job-related and consistent with business necessity. A question is job related and consistent with business necessity if a medical condition would render the employee unable to perform the essential functions of his or her job. When the employee will pose a "direct threat" because of a medical condition disability related questions are considered job related and consistent with business necessity. Generally, employees who pose a direct threat are those in positions affecting public safety.

Questions that are not considered disability related questions include: asking employees about their general well-being; about their current illegal use of drugs and questions about whether the employee can perform job functions (without any mention of a disability); and are always permitted. Employers are also permitted to ask disability related questions when an employee asks for an accommodation or in relation to an FMLA request, so long as those questions are related to the accommodation or FMLA qualifying condition. In conclusion, most of the information employers need to know about their employees can be obtained, it's just a matter of asking the questions in the right way, at the right time.

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