In order to remain compliant with the FCRA (Fair Credit Reporting Act) and other local and state legislations, employers should ensure that onboarding forms, authorization forms, and routine applications have been updated periodically. Notably, in addition to adopting other means, such as arbitration agreements with class waivers, employers might be able to mitigate liabilities through onboarding forms and by making sure that nationwide applications have been regularly updated to ensure compliance.
As a continuation of our discussion, this post is an overview of issues employers within the life sciences industry may avoid and prevent liability.
Separation of Employment in the Life Sciences Industry
Under labor law, separation of employment refers to the end of a working relationship between an employee and an employer (company, organization, or business). Separation of employment can happen due to termination (voluntary or involuntary), resignation, the end of a working contract, or an at-will agreement between the employer and employee.
Due to the exponential growth of corporate transactions, acquisitions, and mergers within the life sciences industry, employers must be proactively involved in understanding the best strategies and techniques for approaching the numerous challenges accompanying the separation of employees and their employers, whether through resignation or termination. As a way of engaging in severance negotiations and/or avoiding breaching contract claims, an employer should assess whether the employee is at-will, since this can have a substantial impact on the ability of the employer to go ahead with employee separation through termination.
If an employer decides to engage in severance negotiations and, accordingly, offer severance to the employee, it must take appropriate measures to protect any confidential and/or proprietary information in possession of the employee, as well as address other matters such as benefit payout pursuant to ERISA (Employee Retirement Income Security Act) (as will be discussed in an upcoming blog under this series).
Elsewhere, if the employee is being terminated involuntarily, the employer must assess and determine the possibility of exposing itself to lawsuits under state and/or federal retaliation and/or anti-discrimination statutes. As a best practice, employers within the life sciences should consider maintaining a severance policy or plan to serve as compensation for separation with employees who need a general release of claims, as a condition of receiving severance. Additionally, in order to protect employer assets and avoid significant penalties and liabilities following separation, it is also critical for employers within this industry to draft restrictive covenants for executives carefully.
In Part XVI of this series and our blog post titled “Severance Agreements, Policies, & Plans in Life Sciences Industry,” we shall move the discussion forward by hammering on the various severance agreements, policies, and plans available to employers and employees within the life sciences industry.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer & Author.