California courts mostly take a no prisoners approach to Business and Professions Code section 16600, the statute prohibiting illegal restraints on trade. Courts broadly interpret Section 16600, which states that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void,” to invalidate most post-employment non-competes and customer non-solicits, including covenants preventing former employees or their new employers from “hiring” employees of a former employer (so-called “no hire agreements”). But Section 16600 does not bar all post-employment covenants–just those that “restrain” trade.
Can Employers Use The California Labor Code To Protect Company Assets?
As employment lawyers based in California are well aware that post-employment non-compete agreements are generally void as a matter of law in this state. Further, there is precedent for awarding punitive damages and disgorgement of profits where employers have knowingly required employees to enter into invalid agreements. Also, the DOL has actively pursued California-based companies engaging in anti-competitive practices when it comes to talent.
Against that backdrop, however, employers need not “throw in the towel” completely when it comes to post-termination restrictive covenants as there are a few narrow scenarios that allow for enforceable post-termination non-competes in California in the right circumstances, and a potential new take on an old strategy to consider.Continue Reading Can Employers Use The California Labor Code To Protect Company Assets?
From The Seventh Circuit: Class Arbitration Determination Is For Courts
The Seventh Circuit recently clarified that courts should determine whether an arbitration agreement provides for or permits class-action claims. The decision in Herrington v. Waterstone Mortgage Corp. is instructive on many levels, not the least of which is its clarity.
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New Expense Reimbursement Requirements For Illinois Employers
Illinois employers will have a new headache this new year, because as of January 1, 2019, they must reimburse employees for all “necessary expenditures and losses” incurred within the scope of their employment. This August, the Illinois Wage Payment and Collection Act changed to specifically include an expense and loss reimbursement requirement.Continue Reading New Expense Reimbursement Requirements For Illinois Employers
Termination Of An MBE Can Lead To Liability
Government contractors are familiar with the obligation to retain minority or women-owned businesses as subcontractors to obtain government work. Increasingly, apex private sector businesses require participation by minority or women-owned businesses as a condition of obtaining work, as well.
A recent decision by the federal court for the Southern District of New York is a cautionary tale, and highlights the care required when terminating a minority business enterprise (MBE) sub-contractor. Annuity Funds Operating Engineers Local 15 v. Tightseal, No. 17-CV-3670 (S.D.N.Y. August 14, 2018).Continue Reading Termination Of An MBE Can Lead To Liability
#MeToo Legislation Lands In California With A Thud
Alyssa Milano tweeted #MeToo just about one year ago. Since then, we’ve seen unprecedented attention on sexual harassment in the workplace and a number of high profile individuals have been taken to task.
For employers, the spotlight, viral encouragement to come forward and public scrutiny is translating to an outpouring of claims and lawsuits. Indeed, in September 2018, the EEOC reported a surge in sexual harassment filings–more than a 50 percent increase in suits challenging sexual harassment over FY 2017.Continue Reading #MeToo Legislation Lands In California With A Thud
Effective Oct. 9, 2018: NY State Sexual Harassment Policy & Training Requirements
As we previously reported, New York State’s new sexual harassment prevention policy and training requirements take effect today, October 9, 2018.
After issuing draft documents in August, the State released final guidance clarifying the new requirements just last week, giving employers little time to get their ducks in a row before the October 9 deadline.Continue Reading Effective Oct. 9, 2018: NY State Sexual Harassment Policy & Training Requirements
Individuals In California May Be Personally Liable For Civil Penalties Resulting From Wage And Hour Violations
The California Court of Appeal recently held that an individual (i.e., an owner, director, officer, or managing agent of a corporate employer) can be found liable for civil penalties resulting from the employer’s failure to comply with California’s overtime pay and minimum wage laws with no showing that the individual misused or abused the corporate laws for a wrongful or inequitable purpose.Continue Reading Individuals In California May Be Personally Liable For Civil Penalties Resulting From Wage And Hour Violations
California Becomes First State To Mandate Female Board Of Directors
California just became the first state to require companies to put female directors on their boards.
“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Governor Jerry Brown wrote in signing Senate Bill 826 into law on September 30. The legislation appears sparked by recent debates around sexual harassment, workplace culture and gender equality, and it comes less than one year after Brown signed the state’s salary history ban.Continue Reading California Becomes First State To Mandate Female Board Of Directors
Sixth Circuit Upholds Mandatory Arbitration Of FLSA Claims
In August, the United States Court of Appeals for the Sixth Circuit (covering Kentucky, Michigan, Ohio and Tennessee) upheld an arbitration agreement that required individual arbitration of claims under the federal Fair Labor Standards Act (FLSA). The Court’s decision is in line with the United States Supreme Court’s decision in Epic Systems Corp. v. Lewis.
Continue Reading Sixth Circuit Upholds Mandatory Arbitration Of FLSA Claims