Professional Service Agreement

Week In Review

November 23, 2015

Refusing to let employee rescind resignation considered “retaliatory”
A federal appeals court has held that an employer’s refusal to allow its employee to rescind her resignation was an adverse employment action because the employer would not have taken this action “but for” the employee’s protected testimony accusing the executive director of sexual harassment. During the course of employment, the executive director asked the employee to attend training with him involving overnight travel; he asked her to lunch; he repeatedly commented on her appearance, clothes, “sexy voice,” and weight; he said she was “fornicating” with her boyfriend. Other employees noticed his behavior and commented on it. The employee reported some of his conduct to her supervisor, but did not formally complain. The employee subsequently provided written notice of her intent to resign, but subsequently requested to rescind her offer of resignation. The employer denied her request. In finding that the employer unlawfully retaliated against the employee, the Court held “Just as an at-will employer does not have to hire a given employee, an employer does not have to accept a given employee’s rescission. Failing to do so in either case because the employee has engaged in a protected activity is nonetheless an adverse employment action.”

Non-compete agreements for existing employees require additional consideration even with intent to be “legally bound”
The Pennsylvania Supreme Court has held that an employee was not bound by a non-compete agreement signed during the course of his employment since he was not offered additional consideration. The fact the agreement stated that the parties “intended to be legally bound” by its terms did not rectify the lack of consideration. Most states have recognized that non-compete agreements are enforceable if they are: (1) ancillary to an employment relationship; (2) supported by adequate consideration; (3) reasonably limited in duration and geographic extent; and (4) designed to protect the legitimate interests of the employer. Regardless of any contractual language about intent to be bound, for a non-compete agreement entered into during the course of an individual’s employment to be enforceable, the employee must receive “new” and valuable consideration—”that is, some corresponding benefit or a favorable change in employment status.” This might include a promotion, a change from part-time to full-time employment, or even a change to a compensation package of bonuses, insurance benefits, and severance benefits. The mere continuation of the employment relationship at the time of entering into the non-compete agreement is insufficient to serve as consideration.

Requiring employee to be medication-free was discriminatory
A federal appeals court has held that a manufacturing employer violated the Americans with Disabilities Act (ADA) when it refused to allow its employee, a factory tool designer, to return to work following medical leave unless he was medication-free. The Court held that discrimination on the basis of taking prescription medication may constitute discrimination on the basis of disability, and without evidence from an expert or otherwise on whether the employee’s medications were incompatible with performing the tool designer job, the question of whether he was “qualified” for the position was uncertain.

SESCO recommends that clients review all applicable policy and practices to ensure compliance. For assistance, contact us at 423-764-4127 or by email at