Why You Shouldn’t Use Homeless People to Fill Job Vacancies [e132]

December 19, 2014

The guys end the week by recapping the story on the Tampa Bay Buccaneers and a local non-profit thatpaid homeless people with food and shelter to work concessions at games. Then they answer, “How risky is it to discuss my company’s IP with job applicants?”

Full Podcast Transcript

NASIR: All right, welcome to our podcast where we cover business in the news and answer some of your business legal questions that you, the listener of our podcast, can send in to ask@legallysoundsmartbusiness.com.
My name is Nasir Pasha. Welcome to our show.

MATT: And I’m Matt Staub. Also, welcome.

NASIR: Well, you just said welcome because I said welcome but, truly, I’m the welcoming person of the two.

MATT: I can accept that. Right now, as we’re recording, it’s raining here in San Diego. There’s a 100 percent chance of rain today which is pretty unheard of. I can’t remember that happening in a long time.

NASIR: I know, I love the rain, but San Diego freaks out in the rain. That’s the only problem with that.

MATT: I’m going to try to stay off the roads as much as possible because people don’t know how to drive in the rain down here.

NASIR: Everyone, too, is like, “Oh, it’s raining outside. I think we’ll take this, we’ll count this as our snow day,” right? “I’m going to stay home.”

MATT: Yeah, people kind of pack it in if it’s raining. So, we will see. But let’s go to a place where it rains sometimes – Tampa Bay.

NASIR: There was a doubt. It rains a lot over there actually, that’s true.

MATT: Yeah. So, Tampa Bay, and a football story, too. We haven’t talked about football in a while, right? Like, in the sweet spot of college football, the regular season’s over. The Bowl games are going to start here shortly. NFL season’s winding down – a few weeks left.

NASIR: Yeah, San Diego had a bad loss last week, unfortunately, and they have a hard game against the Broncos this weekend, I think.

MATT: Oh, yeah. Who’d they lose to last week? Oh, New England, that’s right. Yeah, that was a tough one.

NASIR: It was the Patriots.

MATT: Yeah.

NASIR: Patriots. Did you say Eagles? No, Patriots, right?

MATT: No, I said New England.

NASIR: Oh, New England. I thought you said Eagles.

MATT: No.

NASIR: No, yeah, actually, not the New England; it’s the Patriots.

MATT: So, Tampa Bay, the Buccaneers have had a bad season, but I guess that’s not only on the field – off the field, too. I guess what they had been doing after investigation was done was they were employing homeless people to work in the concession stands at their games. So, it’s bad enough that they don’t get people to attend the games – which I don’t think they do – but they found homeless people and had them working games which, essentially, is human trafficking, I think.

NASIR: Well, okay, you’re correct on that. But the problem is that – by the way, I read this article the same way and I started looking more deep into it and it’s not clear what the facts are but this other company – I believe it’s a church called New Beginnings – only until I started reading what their perspective was that I realized, “Okay. Well, maybe it sounds really bad that you have homeless people that are in your concession stands, but what’s going on is that they are getting paid.” I’m giving you the position of New Beginnings. They are getting paid but they’re getting paid through shelter and food, okay? So, technically, I think a lot of people may still see this as exploitive and things like that, but the question is really, “Are they making a minimum wage out of that?”
The federal law does allow you to be paid through food or lodging in lieu of wages under certain circumstances and there’s even special circumstances if the particular workers are in a disenfranchised – I should say and I believe they had a disability. Nonetheless, when you do pay employees in lieu of cash for food and lodging, then there are some other things like, for example, you cannot charge the worker for more than the actual cost. You still have to pay minimum wage right. It still has to equal to that. And you can’t be profiting out of that housing and so forth. So, I don’t know if New Beginnings meets that criteria but it’s a little different. But I think I agree with most people; there’s still something that sounds wrong about it.

MATT: And it technically says they are unpaid but what that means, like you said, is they’re getting food and shelter in exchange for working, and it is through this New Beginnings organization that call this “work therapy.” It’s “possibly illegal” is how he describes it. This is the CEO of the New Beginnings.

NASIR: Oh, is that right? I missed that. It’s hard to know what the exact facts are because we tried to find this but all we can find is this one article that’s – you know how this works with the news; someone writes an article and then everyone writes an article based upon that articles so it’s all from the same source so there’s still not a lot of information out there so it may be worth a follow-up. But, yeah, there is something really weird about this, you now?

MATT: Yeah, in Tampa, the Rays were doing this as well – the baseball team – but I’m reading another article now and it’s unclear how much they actually knew, the franchises knew about where these people came from. They went through them through the New Beginnings organization. So, it sounds like New Beginning is probably doing the worst of this. But, at the same time, if you’re the Tampa Bay Bucs or the Rays, I think you kind of have to realize what’s going on. It might be a little bit more obvious.

NASIR: The labor division is going to look into this. We’ll see what they come out of it, and the contracts have been basically broken because of this controversy and so forth, but I guess my question is, what if it is above the law, right? I guess this can be argued in either way and I don’t want to make it political here but there might be some benefit here and, because of the potential, it’s not even clear that it is illegal yet. Everyone’s saying it may be illegal, they’re going to look into it and, just because of the potential legalities of it, now all of a sudden, all of these people are pretty much out of work – well, assuming that they were working in the first place for anything – they were volunteering, et cetera.

MATT: Yeah, and another person who’s highly involved in – oh, no, this is the CEO still – yeah, he says he welcomes the federal labor inquiry because he wants to know “whether good or bad, we just want to know where we stand.” So, they obviously didn’t look into this at all from a legal perspective.

NASIR: And that’s not unfair, you know, I imagine this is what happened, it was like, “Okay, you know, we need to be able to find a way to fund the sheltering and food because we can’t get enough donations. We have these people here that are willing to work. Why don’t we try to find them a job? But the problem is we can’t pay them cash because then it defeats the purpose of actually raising the funds towards shelter and food so why don’t we pay them in shelter and food?” I understand how they logically got to that and we’ll see. I mean, like I said, there’s a number of restrictions when it comes to paying your employees in that way and most people don’t because most employees aren’t willing to work in that fashion, but we may have found an area where it actually may make sense. I don’t know.

MATT: You just don’t see this that often just because no one’s really requesting it.

NASIR: Yeah, who would want that, right? If a for-profit industry did this on any sizable scale, it wouldn’t make sense to do it this way. But, in this kind of more charitable-like fashion – I don’t even think this is necessarily charity because they are working for this stuff – it may be a better fit, it may make more sense to actually do it this way.

MATT: All right. Well, enough of Tampa Bay.

NASIR: Crazy Buccaneers. I saw that commercial, was it Warren Sapp? Was he on the Tampa Bay Buccaneers? I feel like he was.

MATT: Yeah, he was.

NASIR: I was going to repeat the commercial. I can’t even remember the commercial now so that was worthless.

MATT: Is it the one where they have the fan and he goes to his house and they had redone his entire backyard and turned it into, like, they put a big ship back there and had all these pirate-related things?

NASIR: I don’t even remember what the commercial was for but I thought it was funny.

MATT: I think Bud Light, I believe.

NASIR: Great. Now, they have to pay us for mentioning that. I’ll send them an invoice.

MATT: I’ll just take a…

NASIR: Just take a percentage?
[MUSIC]

MATT: Question of the day.
“How risky is it to discuss my company’s IP with job applicants?”

NASIR: Intellectual property.

MATT: Yeah, I guess we should specify that it means intellectual property.

NASIR: Gosh, these questions are funny. I guess it depends on what your intellectual property is and number two is you can always have your job applicants sign a confidentiality agreement or a non-disclosure agreement. There’s nothing prohibiting you from doing that.

MATT: Maybe they’ve seen too many things out there in the news of someone signing that and then just ignoring it and then, as the employer of the business, you have to go after this person who you have a valid confidentiality agreement in place but you still have to go out there and go after this person for possibly taking your intellectual property.

NASIR: Yeah, but I hate those NDAs though. Can I go on an NDA rant for a second?

MATT: Yeah, go for it.

NASIR: I just hate NDAs from a conceptual point of view. Don’t get me wrong; as a law firm, we draft, revise, and review them all the time, and there’s a place for them. What I don’t like about it is that it gets in the way of negotiations – and this is a non-legal perspective, frankly – it gets in the way of negotiations. It gives too much importance to information in the sense that, a lot of times, what our so-called confidential information is not really confidential and you want to protect an idea that really doesn’t necessarily need to be protected and it just puts this weird dynamic between the party and imagine, like, you’re recruiting employees and the first thing they come to is that they have to sign this NDA and let’s assume that you’re not dealing with government top-secret information here and you’re just dealing that you want to protect your “idea” and that you’re worried that that job applicant is going to steal it and do it, it just seems like, if it’s so easy to steal then how is there much value to it anyway? I don’t know. I can go on with that.
And, also, NDAs can also be a way or a predicate to someone causing trouble for you. If I have any choice, I don’t mind having someone else be bound to an NDA but, for our clients, I tend to advise them not to sign an NDA unless they absolutely have to. That’s my NDA rant, signing out.

MATT: Okay. I mean, in this situation, I don’t know how much they should really even worry about it. it’s how in-depth are you going with these job applicants?

NASIR: Yeah, what are you telling them?

MATT: Even if they ask a very specific question, you can just say, “If we hire you, we’ll go over that in more detail.” I feel like that’s the much easier thing to do.

NASIR: And, remember, true intellectual property and protecting it – whether it’s trademarks, copyrights, patents, things like that – aren’t stealable – is stealable a word? Stealable? Able to be stolen? They aren’t stealable – which is a word now, if it’s not – anyway, right? Because you have those protections.

MATT: Right.

NASIR: The only IP that’s not covered is really trade secrets or true confidential information which are usually trade secrets anyway because trade secrets are basically confidential information that have value and that are kept as secrets and things like that. So, I wouldn’t give away any trade secrets to job applicants, right?

MATT: Or anyone.

NASIR: Or anyone. But, even if they have a confidentiality agreement because, remember, you know, you can have someone sign an NDA but the question is how are you going to know if that person told somebody else? Number one. Number two, if you use it often, how are you going to keep track of all these NDAs? And, number three, if you have to, are you actually going to be able to enforce and incur the expenses of enforcing the NDA. These are all things to think about and the counterargument, of course, is that, “Well, if someone signs the NDA, then they’re going to be less likely to divulge that secret,” which has its merit.

MATT: Well, maybe that’s what’s going to here, the company that is looking for these job applicants, they won’t tell the name of the company and it’s trademarked.

NASIR: Yeah, you won’t know what the job’s about or who you’re working for until you sign this confidentiality agreement.

MATT: Or maybe they’ve got a patent on the way they interview people – the process.

NASIR: Yeah. Ah.

MATT: I don’t know.

NASIR: I think you’re getting closer to what the truth is. It’s somewhere around there.

MATT: I think we answered that thoroughly enough.

NASIR: Quite thoroughly enough. Lots of lessons over today’s episode.

MATT: Lessons, pay people in actual money instead of in exchange for room and board.

NASIR: Number one.

MATT: And don’t divulge your trade secrets.

NASIR: Number two. Very good, all right.
All right, that’s all you need to know pretty much for business and that’s what we’re here for. Thanks for joining us.

MATT: We should do these summaries every episode of just the two takeaways – ten words or less.

NASIR: Yeah.

MATT: Keep it sound. Keep it smart.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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