Confused about termination

What is the name of your state? Wisconsin
Help Needed! Brief Background; my husband's position was terminated last week. He and the owner of the business started out together as coworkers 21 years ago for a separate Manufacturing company. When the company left seven years ago, a smaller "spin off" company was started (or basically given) to his co-worker by the parent company. My husband, a Manufacturing Engineer, chose to start his own small machine shop rather than continue with his co-worker. Through some crafty maneauvering with my husband's partners-to-be, this co-worker managed to put a halt to our new business venture. Since I was pregnant at the time, my husband chose to accept the job offer that had been offered to him by this coworker. He became his Senior Mfg. Engineer, and is VERY good at what he does.
Over the past seven years, this new business has been failing due to poor management by the owner and his management team. Frustrated, my husband has dusted off the old business plans, rewrote them, found some investers and was running the confidential business plan past some bank and city officials.
Absolutely all the planning, contacts etc. has been done OUTSIDE WORK HOURS, and with no "trade secrets" from the past company, or information other than what my husband has gained in his 21 years as an engineer.
His current employer somehow got ahold of his plan (so much for confidentiality disclaimers and honest city officials and bankers)and fired my husband last Saturday. The only thing they told him was that his services were no longer required at their place of business, and when asked why, he was told that the company was going in a different direction and that his position was being "eliminated".
He was an "at will" employee, and we know exactly what that means. Another coworker that my husband had shared his dream ideas with was also let go.
Since we have three children and I do not work, he filed for unemployment, which was granted. When asked on the phone how his job was terminated, he told them he was fired. When asked the "exact wording" by the questioner, they concluded that the term "eliminated position" was a lay-off rather than a firing. Today we received notice that they were questioning our eligibility due to the way in which he was terminated.
We acquired a copy of his work records from the employer, and on the sheet my husband signed, it was identified as a "involuntary termination"...even I know that is a firing.
To make matters even more confusing, we received a letter from the company's lawyer, stating that they felt we had company property that had not been returned to them.....something that we DO NOT have....no financial records, vender lists, customer lists, trade secrets etc.
My fear is that this coworker is concerned my husband's small business of 5-19 employees will ruin his 140 employee company. I can tell you that that has always been a major concern for my husband over the past seven years...we have discussed in detail the problems that might arise from employees applying for jobs with my husband (who they greatly respect) rather than staying with their current employer. We always felt his boss would try to fight "legally" to stop our business from starting and succeeding, so we purposely were going to target completely different clients....and try not to hire too many of the employees that would most likely flood us with applications from the company he works for now.

Questions:
Was the paper he signed at termination required to have a reason filled in where it asked for one?...should he have been told the real reason at the termination? The employees were told that he was starting up a business and that he had done some of the planning on company time (absolutely untrue and we are sure there is no evidence of it....since it didn't happen)

The legal papers from the lawyer...do you think they are standard lawyer stuff or the start of a lawsuit to throw our new business off track right now? (My husband was never a contract employee)

How do we respond back to the legal letter stating that we have absolutely NO company information, trade secrets, software, computer discs (my husband NEVER worked from home on anything work related). Should we do this through a lawyer?

PLEASE HELP.....THIS IS SO PATHETIC, BUT WE ARE JUST AN AVERAGE FAMILY THAT WAS CUT DOWN FROM A $50,000 A YEAR JOB TO $324.00 A WEEK, WHICH IS IN DISPUTE WITH THE UNEMPLOYMENT AGENCY!
WE MAY BE SOME OF THE LAST TRULY HONEST PEOPLE LEFT IN THIS WORLD, WHO ARE LEARNING THE HARD WAY THAT THE BUSINESS WORLD CAN BE REALLY NASTY.

Any help will be appreciated.

"Involuntary termination" means more than just fired. It also means layoff, lack of work available, unable to work for medical reasons, and a host of other things. Essentially it means, "He did not quit".

Beth is from your state and may have some suggestions based on local law, but I do know that Wisconsin is NOT one of the very few states where the employer is required to give a reason for termination. (Even in those states that do require it, they generally only have to provide it upon written request from the employee, and there is generally a limited time frame.)

With regards to your other questions, I don't think they are things that can be handled on a public bulletin board. You need a lawyer to review these things for you. I realize that money is an issue, but many lawyers give free consultations; also you can contact the Legal Aid office in your area. They are in business to help people who cannot afford lawyers but need legal advice.

There is nothing in Wisconsin or federal law that makes this termination illegal or that would require the employer to give your husband the real reason for his termination. It's pretty obvious the reason is his pursuing establishing his own business but they don't have to tell him that. They can call it a position elimination if they wish to.

I can't see any basis in WI UC reg's to bar your huband's receiving benefits unless he is engaging in gainful employment, i.e. he's earning an income from the business he's setting up.

As far as responding to the atty's letter, I suggest your husband tell him the truth - he doesn't have anything. The burden of proof is on his ex-employer to demonstrate that your husband did take or retain company property after he left. In other words, your husband doesn't have to prove he doesn't have anything, they have to prove he does. If after responding by letter anything further from the attorney ensues, then I'd suggest your husband consult with an attorney. (And when he does respond, brief is best. "In response to your letter of September XX, this is to advise you I have no company property, documents, software or any other materials or information which belong to ABC Company in my possession. Sincerely...." That's it.

Thank you both for responding so quickly, an entire day of searching the net for information, finally has some merit!

My other concern is the statement in the attorney letter Re:"trade secrets". All my husband's skills were acquired on the job from the original "parent" company (which still owns 26 percent of this new company, and provides 94 percent of their work). He did not go to college to earn his degree....Over the past seven years with company "B", he has only fine tuned his skills due to the demands of keeping this unorganized shop running.
What exactly could they consider "trade secrets" that would be their property? My husband has his connections with tooling salesmen etc. who have connections for him for work, but these were never used through a work-related experience. His customer base certainly would not include the parent company....due to the nature of their relationship with the spin off company.....(the sba has concluded they never made the break from the apron-strings)...and my husband certainly would not run or manage his business in any manner like the one he just left. (The original, parent company was wonderful)

Could trade secrets involve what he has learned over the last 15 years about the business, or are they specific to the company?

Appreciated......

lambfries, you're really out of employment law and into contract law issues here so I don't know how much cbg or I will be able to help you. We're just simple HR folks.

If your husband never signed a trade secrets or intellectual property agreement with his ex-employer, it's my opinion that the employer will have a tough time pursuing that. I think what's going on is that his ex-employer is just huffing and puffing about the new business your husband is trying to establish with no substance behind the bag of wind that their attorney is blowing your way. I suspect it's just a scare tactic but you really need to consult with an attorney for bonafide legal advice. Perhaps IAAL or one of the other attornies who post here can shed some light.

Good luck.

Thanks Beth for the advice you've been able to give....."simple HR folks" are people too, and what you've given me is invaluable, and at least sheds a bit of light on the situation. I only wish the company's HR person (who use to be a personal friend of my husband with the old company) would be as useful to us. But we all know where her interests lie....with the paycheck.

Again, Much appreciated.

Don't judge her too harshly. HR people have a very difficult line to walk sometimes between what's right for the company vs. what's right for the employees, and they don't have the power to force an employer to do the right thing. All they can do is make recommendations, and it's up to management to decide what they want to do. It's very frustrating sometimes when you KNOW the company is making a bad decision and there's nothing you can do about it. In addition to that, both Beth and I have many more years of experience than either of us likes to admit, but your questions are only just barely balancing inside employment law. Someone who has not practiced HR as long as we have may just plain not know the answers.

In any case, you've reached the point where you really need an attorney familiar with contract law to look at what you've got. Good luck and keep us posted.

Hey - you're ageing me by the minute, cbg.

So, do you disagree?

No. You are absolutely correct.

Hey Beth,
Since you gave me some great advice before.....here's another quesiton re: Unemployment Insurance. Sorry, another novel-length question.....

As I stated before, we received the letter from the lawyer, and then close behind came the letter from State of Wisconsin DWD questioning our eligibility for unemployment.

One of our friends had a relative who had exactly the same problem with his employer.....when he inquired about it, he was told that he would be able to receive the unemployment benefits IF he signed a letter promising not to reveal trade secrets of the company. He did, received his benefits and never heard anything else again.

Is this legal? Can an employer pressure an ex-employee to basically "sign a contract" after termination? (And in the meantime hold his UI above his head). We have already established that my husband was a non-contracted "at will" employee.....he did sign a release that he read his employee manual....which does have a section re: confidential information. They ask you to "please do not discuss [company] business with anyone who does not work for us" etc. It also states that you MAY be asked to sign a confidentiality statement if dealing with confidential information....because of it's seriousness, disclosure of such information COULD lead to dismissal....

The only thing he signed (on the day he began working), had a clause that stated..."I acknowledge that this handbook is NEITHER A CONTRACT OF EMPLOYMENT NOR A LEGAL DOCUMENT. I have received, read and understand the policies contained in this manual and will read revisions made to it in the future." It further more states that "Unless I have an individual written employment contract, my employment relationship is voluntarily entered into and subject to termination at will at any time by either myself or the company".....There was never a "contract" agreement signed by either party.

So since he never was asked to sign such a statement while he worked for them....can he be pressured into signing one in order to receive his Unemployment Insurance....AFTER he was terminated?

Sorry so long-winded, but we are trying very hard to educate ourselves ahead of calling around to lawyers tomorrow.

I answered my own question about "Trade Secrets" via the internet....but have a new one:

"Restrictive Covenants"...would these also need to be presented in contract form and signed? I am beginning to think that the Ex-employer may be wanting a "non-compete" or an agreement not to utilize ex-employees signed at some point. Are Restrictive Covenants ever just "implied" or do they have to be in written form and signed?

Still confused, but learning ALOT in a short time.

Again, very appreciated.....

Employers do not decide who receives unemployment and who does not. Employers may CONTEST benefits for an individual if they believe the person should be ineligible given the circumstances under which they left but the State makes that decision based upon the State's UC regulations.

Now whether your friend rec'd a lot of hooey from the employer (he would have been eligible for benefits anyway) or whether the employer was saying they knew he was ineligible for benefits and offered not to contest them if he signed the agreement, I can't say. Is it legal? Interesting question but I can't think of any reason why it would be illegal. I've always told the truth to the UC folks. If they find out the employer lied to them, I'm not sure what the consequences are. What I can tell you is that in my personal experience, many employees lie to the UC Division - claim to be laid off when in fact they were fired for misconduct when they apply for benefits, claim at a hearing that their signature on a disciplinary action was forged, etc., and I don't see them being penalized so I'm guessing there isn't much in the way of sanctions in UC reg's on for this.

I doubt it's illegal for an employer to take advantage of an ee's lack of knowledge of the law however and say they'll "grant" benefits if the ee signs something. The individual is always free to contact their State's UC Division or an attorney and find out if the employer is talking hogwash. If someone chooses to sign a document rather than do some checking on the law which would be extremely easy, I guess that's their choice.

As far as restrictive covenants go, you'll need to talk to an attorney about that one. It's a contract law issue and outside my area of expertise.

Thanks Beth, we are attempting to connect up with a recommended attorney today to schedule a consultation. I guess we will find out tomorrow if his ex-employer is claiming "firing for misconduct"...we have a phone interview with the DWD in the afternoon. I wouldn't put it past him....but then again, am not surprised about the twists and turns we have been meeting over the past two weeks.
After reading some of the other problems others post on this site....Internally I'm feeling alot better, there are others in much worse situations.
Thanks again...and keep up the good work.

New twist....turns out the company IS contesting the Unemployment Benefits.....alleging that my husband was attempting to be a direct competitor to their business, and that my husband was using company time to plan it. They are basing this on phone calls from vendors/suppliers that have called TO the company looking to talk to my husband (a common occurance since he dealt with a majority of the sales people as well)

Being a Manufacturing Engineer, he has subscribed to trade magazines for the past fifteen years...that get delivered to the workplace. My husband....who spends every minute of extra time reading about new technologies/procedures etc...just to keep up on the business...would send those generic little "cards" that you circle the numbers on, back to obtain more reading material. (This had nothing to do with his OWN business, but could pertain to the job he held as well...part of his job description was to keep up on technology). Evidently, they are basing his "misconduct" on a few eager sales people who tried to contact him at work regarding the products they sell, based on his name on the card. I imagine that the company must get several of these types of calls a day that aren't directed to his name. Note....these were all incoming calls...NEVER outgoing....

Needless to say, we will know the exact outcome of their decision within the week....and this provides us with even more to talk to the lawyer about (we have one scheduled the end of the week). We have decided that the extra expense of the lawyer will definitely be worth it.

A lot of mis-truths were exposed during the call with the DWD.

How ironic....the lawyer we were going to work with...suddenly remembers they are representing the Ex-employer and it would be a conflict of interest to work with us. We can't use the lawfirm that regularly represents the ex-company for the same reason. Seems that he has connections with every available Employment Law lawyer in our area.

How do I find a reputable lawyer outside our area....I realize there are (general) referral numbers to call, but would like to be able to base a choice on personal referrals....where could I get such information?