Baker McKenzie’s North America Trade Secrets Practice is a true cross-disciplinary team of industry ranked and recognized intellectual property, employment, tech transaction, litigation and trial attorneys exclusively dedicated to helping clients identify, protect, prosecute and defend their most valuable, complex and market-differentiating trade secrets throughout the US, Canada, Mexico and globally.
Our Focus on Trade
California’s regulators have made employment noncompetes (and knowing which employees are bound by them and how!) a key compliance item.
Effective January 1, 2024, AB 1076 amends Section 16600 of the state’s Business and Professions Code to “void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment
Special thanks to Celeste Ang and Stephen Ratcliffe.
We launched the seventh annual edition of The Year Ahead: Global Disputes Forecast, a research-based thought leadership surveying 600 senior legal and risk leaders from large organizations around the world and highlights key issues we anticipate to be crucial for disputes for this year.
The new year brought some good news for California employers. On January 1, 2024, U.S. District Court Judge Kimberly Mueller issued a decision permanently enjoining California state officials from enforcing AB 51, the contested law that sought to prohibit employers from “forcing” job applicants or employees to enter into pre-dispute employment arbitration agreements covering certain discrimination and retaliation claims. The permanent injunction reaffirmed the ability of employers to mandate arbitration for most employment disputes.
This decision comes less than a year after the Ninth Circuit found that the Federal Arbitration Act (FAA) preempts AB 51 in Chamber of Commerce of the United States v. Bonta. As noted in our blog post on the Bonta decision, the Ninth Circuit ultimately upheld a temporary injunction against AB 51, allowing California employers to continue to use employment arbitration agreements while the matter was litigated, and which—given Judge Mueller’s permanent injunction—now can continue indefinitely.
Here is a quick summary of the AB 51 litigation leading up to the January 1, 2024 permanent injunction:
In late breaking news out of New York, Governor Kathy Hochul has vetoed legislation that would have imposed the most restrictive state-level ban on employee non-competes in the United States. Last June, the New York State Assembly passed S3100, which if signed by Governor Hochul, would have voided any contract restraining anyone from engaging in a
Special thanks to co-presenters Ricardo Castro-Garza, Alfonso García-Lozano and Javiera Medina-Reza.
This year our team helped Mexican employers overcome a range of challenges across the employment law landscape — from keeping up with evolving health & safety obligations, defending contentious employment disputes, supporting the legitimization of collective bargaining agreements, and much more.
In
We are pleased to share a recent LegalDive article, “Why companies should review noncompetes in equity award agreements,” with quotes from Barbara Klementz.
Given increased government scrutiny, employers need to be mindful of the time periods noncompetes cover and review state-specific requirements.
In the light of the sharp focus the federal government and a growing
Special thanks to co-authors Cynthia Cole, Heiko Burow, Inez Asante and Alysha Preston.
In June, New York Senate Bill S5640 unanimously passed both houses of the NY legislature. It seeks to enact restrictions on invention assignment agreements used in the employment. S5640 now moves to the desk of Governor Kathy Hochul and if signed into law, it will amend the New York Labor Law effective immediately.Continue Reading Creating IP in New York? Watch out! Your employee may soon own more than you think
Special thanks to Geoff Martin and Maria Piontkovska.
On March 3, 2023, the Criminal Division of the United States Department of Justice (“DOJ”) published details of a three year Pilot Program Regarding Compensation Incentives and Clawbacks (the “Compensation Pilot Program”). The Compensation Pilot Program is effective March 15, 2023 and from that date it will be applicable to all corporate criminal matters handled by the DOJ Criminal Division. At the same time, DOJ also updated its Evaluation of Corporate Compliance Programs guidance document to reflect the criteria introduced by the Compensation Pilot Program, among other updates.
Background and Objectives of the Compensation Pilot Program
The concept of incentivizing corporate compliance by structuring compensation programs to reward compliant behaviors and punish non-compliant ones, is nothing new. For example, prior editions of the Evaluation of Corporate Compliance Programs addressed appropriate incentives for company management and executives to promote good governance and compliance, and expectations about the consistent application of discipline against employees found to be involved in misconduct.
However, in a September 2022 memo to DOJ prosecutors titled: “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group“, Deputy Attorney General Lisa Monaco indicated that DOJ intended to go further on this particular topic. In the memo, Monaco indicated that DOJ would expect companies to design compensation structures not only to incentivize and reward good compliance practices, but also to financially penalize individual employees found to have been engaged in misconduct, including by clawing back compensation after the fact.
DOJ’s objective in this initiative is to encourage companies to redistribute some of the cost and penalties associated with individuals’ criminal conduct away from the company (and its shareholders) and onto the individuals themselves. Because misconduct is often discovered after the fact, measures that enable retroactive discipline and clawback of compensation already paid, are of particular importance to DOJ. These measures also reinforce DOJ’s continued focus on individual accountability which has been another of DOJ’s recent areas of focus in addressing corporate criminal matters.
Six months after Monaco’s memo, the Compensation Pilot Program now puts concrete DOJ policy in place to implement those objectives. At the end of the three year pilot period, DOJ will determine whether the Compensation Pilot Program will be extended or modified. If it is deemed a success, we can expect the Compensation Pilot Program to be fully adopted by DOJ. Continue Reading Practical Considerations When Addressing New DOJ Compensation Incentives and Clawbacks Program
