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.
Domino’s Not A Joint Employer In Wage Dispute, Judge Rules
In a welcome decision for franchisors, and first of its kind in the Second Circuit, the Southern District of New York ruled that Domino’s Pizza Franchising LLC, the franchisor (Domino’s), did not exert enough control over its franchisee to warrant joint employer status. This determination means Domino’s will not have to face claims brought under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) by current and former employees of a Domino’s franchisee.
Click here to read more about the case, the decision and takeaways for employers.
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.
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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.
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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).
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#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.
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It’s High Time: Ontario Finally Passes Its Cannabis And Smoke-Free Legislation
Thanks to our Canadian colleagues for this alert:
Ontario’s revised regulatory framework for cannabis is now in effect. Bill 36, the Cannabis Statute Law Amendment Act, 2018, received Royal Assent and came into force on October 17, 2018, amending 18 provincial statutes including the Cannabis Act, 2017 (now the Cannabis Control Act, 2017 ) and the Smoke-Free Ontario Act, 2017 (SFOA 2017).
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Eradicating Modern Slavery: A Guide For CEOs
Today, an estimated 40 million people are living in modern day slavery—including an estimated 16 million individuals in forced labor across global supply chains.
Given the importance of this issue, we are proud to introduce a new publication, Eradicating Slavery: A Guide for CEOs. Prepared by the B Team in partnership with Baker McKenzie, this guide provides practical guidance and examples of successful collaboration among companies to help end modern slavery.
While there’s been increasing concern and interest from business around tackling modern slavery, to date corporate leaders have been unsuccessful in meaningfully moving the needle to end this horrific practice. The B Team’s Guide seeks to help the private sector understand its responsibility and power in making a real impact on this issue and bringing freedom to those who need it most.
Click here to access the guide.
You’re Invited! Asia Pacific Employment Law Update | October 16 In LA & October 17 In Palo Alto
Please join us for a complimentary breakfast briefing in Los Angeles on October 16 and in Palo Alto on October 17 to study new employment law updates from Asia Pacific.
Baker McKenzie’s employment law attorneys from Australia, China, Hong Kong, the Philippines, Singapore and Taiwan are coming to California to translate the recent trends, make sense of new laws and break down the hot topics facing US multinational employers operating in those countries today. Topics include:
- Workplace gender equality reporting in Australia
- The #MeToo movement in China
- Work hour flexibility in Taiwan
- Major employment law changes expected in Singapore
- Contracting in the Philippines
- Recent bonus/share option avoidance cases in Hong Kong
Click here for more details, including how to register.