Coles Corner Winning Wine: April 2009 (Archive)

April 2009 - The 2005 Grenache Blanc from Curran Wines can be described best as starting with strong herbal/grassy notes of a Sauvignon Blanc then balanced with light sweetness and a slight hint of carbonation. But this is no dessert wine. The Grenache Blanc is crisp and delivers a lively fresh glass that is perfect for the season.

Employment-Based Immigration: What Every Student Should Know

On April 16, The Coles Firm presented the speech "Employment-Based Immigration: What Every Student Should Know" to a room-full of students at a local Dallas college. The speech primarily focused on employment-based visas including, H-1B, J, L, E, and TN. Also discussed were potential pitfalls with Green Card applications and non-immigrant visas.

Indicative of immigration law constantly changing and evolving, on the day of the presentation, the government extended the deadline for government contractors to enroll in E-Verify. Government contractors have until June 30, 2009 to enroll in E-Verify. This is the third extension of the deadline for government contractors. As discussed during the presentation, E-Verify is an internet based system that allows employers to quickly verify employment eligibility of new hires. Currently, E-Verify is voluntary (except Government Contractors) and free to employers. An employer must be enrolled in E-Verify for a student to be eligible for the STEM OPT extension (29 months work authorization versus standard 12 months).

We thoroughly enjoyed answering questions from the students and hopefully provided a framework for the students as they seek employment after graduation.

New Texas Non-Compete Decision

On April 17, the Texas Supreme Court delivered another opinion on its interpretation and enforcement of non-compete agreements. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding appears to expand, albeit minimally, the Court’s well-known Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson decision. In 2006, the Court in Sheshunoff expanded its prior decisions on non-compete agreements and found a non-compete agreement enforceable where (1) the employer expressly promised to provide the employee confidential information, (2) the employee expressly promised to not disclose the information, and (3) subsequently the employer provided the employee with confidential information.

Mann Frankfort differs from Sheshunoff, however, because the employer in Mann Frankfort made no express promise to provide the employee access to confidential information. Based on this failure to expressly promise to provide confidential information, the Court of Appeals refused to enforce the confidentiality agreement. The Texas Supreme Court, however, reversed the Court of Appeals and held that an implied promise by the employer to provide confidential information satisfies the Sheshunoff requirements.

Is there a possible pitfall with non-compete agreements that rely on an implied promise? The Court in Mann Frankfort, whether or not intentional, appears to limit an implied promise as it relates to non-compete agreements. The Mann Frankfort decision suggests an implied promise exists only “when the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee.” This appears to indicate the Court might find, depending on the nature of the work, an employer did not impliedly promise it would provide confidential information. What type of work would result in an implied promise not being found? It is uncertain, but the Court almost certainly will determine an implied promise exists for CPAs (the position in Mann Frankfort). Beyond a CPA, we must wait to see if the courts extend Mann Frankfort to other professions or jobs.

So what does the prudent employer do? The easiest answer is expressly provide in your non-compete agreement that you (the employer) promise to provide the employee confidential information. There are many other issues with the validity and enforceability of non-compete agreements, but providing this express promise should limit exposure to any pitfalls in the Mann Frankfort decision.

A No-Win Situation

The United States Supreme Court heard arguments yesterday in the case of Ricci v. DeStefano (click here for a transcript of the oral arguments). The case stems from a decision by the city of New Haven, Connecticut to throw out the results of a fire department promotion exam because too few minorities passed. As a result, a group of 20 white firefighters sued the city for race discrimination under Title VII of the Civil Rights Act of 1964.

The importance of this impending decision and its far-reaching effects resulted in coverage by, among other media outlets, MSNBC and CNN.

While the city argues it risked a disparate impact race discrimination suit by the minority firefighters if it carried out the promotions based on the test results, the white firefighters claim the city intentionally discriminated against them by refusing to promote them on the basis of race. To put it bluntly, and as Justice David Souter stated during oral arguments yesterday, the city is left "in a damned if you do, damned if you don't situation."

If the city carried out the promotions, the minority employees could have sued under Title VII for race discrimination alleging the test created a "disparate impact" due to alleged flaws in the tests that caused minorities to score lower on the tests than white employees. However, since the city threw out the test and the promotions because no minorities would be promoted, the white firefighters argue the city made an employment decision based on race (i.e. intentional discrimination). Both sides make a compelling case.

As you can imagine, this case is being closely watched and has garnered interest from numerous advocacy and business groups. These groups, and all of us really, want to know how far the Court will go in allowing race to be used as a consideration in filling jobs.

While a decision is not expected for a few months, it appears there currently is an ideological split on the Court with Justice Anthony Kennedy as the crucial swing vote. Many insiders believe Justice Kennedy will side with the white firefighters, leading to a 5-4 decision in their favor.

So where does that leave employers? For the time being, without an answer. The best hope is clear guidance from the United States Supreme Court this summer. We'll be sure to update you on their decision as soon as it is released and let you know the impact of that decision on your business.

Coles Firm Chosen to Present at HR Southwest

The Coles Firm will present "Candid Camera: Secrets from Plaintiffs' Lawyers" on Wednesday October 14, 2009 at 2:00 p.m. at the Society for Human Resource Management (SHRM) HR Southwest Human Resources Conference and Exposition at the Fort Worth Convention Center in Fort Worth, Texas.

HR Southwest, currently in its 68th year, is the largest regional Human Resources conference in the United States and offers more than 100 certified educational sessions and more than 250 exhibitors.

We look forward to presenting to an amazing collection of Human Resources professionals and we hope you can attend our presentation.

H-1B Update

The End of An Era?

It became a ritual over the last few years. Beginning in February and ending on March 31, immigration lawyers and clients worked against the clock to prepare, package, and file H-1B visa applications. Since 2007, April 1 was (for immigration lawyers and clients) the equivalent of April 15 for CPAs. But unlike CPAs and federal tax-filers across the U.S., immigration lawyers and their clients faced weeks of uncertainty after their filing. When you file your taxes you know you are due a refund or owe for underpayment. For H-1B filers, however, once USCIS received all applications they conducted a lottery to determine whose application would be considered…and whose would be returned to sender.

Apparently that process (and the glut of H-1B filings each April) is no longer. Yesterday, USCIS announced they only received approximately 42,000 applications for the 65,000 visas for the 2009-10 fiscal year. So after submitting our applications for delivery on April 1, and in light of this recent news, here are a few thoughts and observations:

-H-1B applications in the lottery era peaked in 2007, with nearly 200,000 applications filed for 65,000 visas;

-In light of the H-1B lottery, lawyers and clients have used more and more creativity to meet the demand for foreign workers; and

-The recent steep downturn in our economy (combined with the uncertainty of the H-1B lottery system) certainly had a noticeable impact on H-1B applications, cutting filings by 75% from the 2007 peak.

There is a Catch-22 at work here. Just as the Obama administration announced this week that comprehensive immigration reform remained on its agenda, we now see the impact of the economy, which suggests a reduced need for temporary work visas. But do not be misled. The problems with our immigration system primarily derive from the lack of flexibility inherent in our cap-based system. Fixed caps create artificial ceilings that, in most cases, do not reflect current needs. So in 2009, the ceiling may be reached, but the demand changed dramatically from 2007 and 2008. And while we all hope the economy will rebound and recover soon, what does that mean for 2010? The last thing a rebounding business needs in 2010 is increased demand for temporary work visas that returns us to 2007 and 2008. Perhaps a flexible cap tied to national unemployment figures? Or a bifurcated filing season, much like H-2B seasonal visas? There may not be a perfect solution, but our current system needs a healthy dose of realism and pragmatism to avoid past crises.

The Coles Firm Hosts In-House Counsel Panel Discussion for DAYL

Last Friday, March 27th, we hosted a panel discussion for the Dallas Association of Young Lawyers at the Dallas Bar Association's BELO Mansion. The panel included Camille Corbin of American Airlines, Zach Garsek of Zale Corp., Clayton E. Greenberg of Title Resources Guaranty Company, Michael Li of Ryan and Company, and Kenya S. Woodruff of Parkland Health & Hospital System. Mike Coles of our firm moderated the panel discussion.

The discussion was designed to provide young lawyers with insight and information about how to establish and improve relationships with in-house lawyers. Topics included business development, billing practices and pet peeves, and client service. As a cautionary note for young lawyers, the panelists noted that while extravagant gifts and tickets to sporting events were certainly nice, most in-house counsel recognize these items lead to unnecessarily high billing rates. Certainly something important to keep in mind!