If you are planning to acquire a manufacturing facility in the U.S., this raises several employment law issues. Understand the legal requirements to remain in compliance.
Workplace Safety
Your US subsidiary will need to comply with the safety standards and requirements of the federal Occupational Safety and Health Act (OSHA). Under the law, employers must provide a workplace free from serious recognized hazards and comply with all rules and regulations. These include, but are not limited to:
- Examining workplace conditions to conform to OSHA standards
- Providing employees safe tools and equipment and properly maintaining equipment
- Using clear posters and signs to warn of potential hazards
- Establishing, updating and communicating operating procedures and providing safety training
- Employers with hazardous chemicals in the workplace must develop and implement a written hazard communication program and train employees on the hazards they are exposed to and proper precautions
- Medical examinations and training when required
- Prominent posting of the OSHA poster informing employees of their rights and responsibilities
- Adhering to reporting guidelines incidents
Now that many employees will have access to your technology and know-how, restrictive covenants and confidentiality and non-disclosure agreements may be needed.
Restrictive Covenants
Employees are frequently asked to sign “restrictive covenants.” A restrictive covenant is an agreement by an employee not to compete with the employer after leaving the company. To be enforceable, the covenant must be reasonable in scope, duration and geographic area. A restrictive covenant will probably be unenforceable if it bars competition for an unreasonably long period, or restricts activities in areas in which the employer does not do business. The covenant may be unenforceable for other reasons as well, such as the public’s need for a particular service (restrictions on doctors and lawyers have been stricken on this ground).
Confidentiality and Non-Disclosure
Restricting employees’ use and disclosure of trade secrets and confidential information may be another important concern. Although employees are under a general duty not to disclose trade secrets or confidential information, or to use such information for their own benefit, employers often require that employees sign confidentiality agreements. These agreements, like restrictive covenants, are analyzed for reasonableness. Courts judge whether the employer’s information should be protected (for example, customer lists are often not protected), and whether the agreement protects the employer’s interests without being unduly burdensome. The duration of the agreement is often an issue. In cases involving disclosure of secret technology, courts often prevent disclosure only for as long as it would take another business to discover the technology through reverse engineering.
Unions
Depending on the size of the work force and the nature of the industry, it may also be necessary to deal with labor unions. The National Labor Relations Act forbids employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or from working together to improve terms and conditions of employment, or refraining from any such activity. Similarly, labor organizations may not restrain or coerce employees in the exercise of these rights.