Many state legislatures spent 2017 tinkering with post-employment covenants. Given the growing trend to legislate locally and the employee mobility issues that seem to nag every employer, we thought the New Year would be a perfect time to review and revisit your post-employment covenants. So for our multi-jurisdictional employers (which seems to be everyone these days), how do your post-employment covenants legally measure up?
If your company operates in a territory covered by the 4th circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina) and requires employees to sign a noncompete agreement with language similar to the following, it may be time to consider revising the agreement:
On Wednesday, June 29th, the House passed H. 4434: An Act relative to the judicial enforcement of noncompetition agreements, which includes a number of provisions that have long been discussed as the necessary components of non-compete reform.
If you’ve been following my corporate divorce series, you are familiar with my view about who owns what at the end of the employment relationship, who pays what to whom, and even how to end the relationship. But I have yet to address the notion of custody and whether my employment-as-marriage metaphor withstands an analogy to the post-employment solicitation of employees.
It is the employee’s relationship with fellow employees – and the employer’s attempt to insert itself into this relationship – that drives this discussion.
A recent Circuit Court case confirms that the term “non-inducement” means just that. In American Family Mutual Insurance Company v. Graham, the Eighth Circuit affirmed a jury verdict against an insurance agent who, the jury found, breached a non-inducement provision based in part on his promise that he could work up some “quotes that will make you smile.”
Those of you reading our Employee Mobility blog posts are familiar with California’s unique approach to non-compete agreements: they are, except in a few limited circumstances, unenforceable in the Golden State. And that unenforceability extends to post-employment non-solicitation provisions restricting individuals from soliciting business from former customers — a “warm market” to those in the know in the sales community.
But a recent decision highlights an exception to this (infamous) California ban on post-employment solicitation.
The latest casualty to post-employment covenants came at the hands of a Connecticut trial court, which struck down a non-solicitation agreement under New York law as reaching beyond the legitimate business interests that deserve protection.
Written by Michael Arnold
While it seems like it happened forever ago, it was just back in July when LeBron James once again held this nation captive over where he would play basketball. Four years ago, he jumped ship to Miami to join forces with Dwayne Wade and Chris Bosh, which led to two championships and four straight finals appearances. (Note: one championship really since San Antonio lost 2013’s championship; Miami, and LeBron specifically, didn’t “win”). Now the King has decided to return home to form the new “Big 3” with the promising (yet oft-injured) young superstars, Kyrie Irving and Kevin Love. With his latest “decision,” LeBron almost instantaneously went from one of the most loathed people in the world to one of the most liked. Redemption is an amazing thing. Last time he left, he pretty much did everything the wrong way; but this time was a different story.
LeBron’s departure from and return to Cleveland has some decent parallels to the non-compete world that are worth exploring.
Written by Jen Rubin and Jacqulyn Lewis
We all know the default American Rule for attorneys’ fees: unless you get fees in a contract or from a statute, you shouldn’t count on someone else paying the freight if you win your case. But a recent non-compete case brings home an exception to this rule: attorneys’ fees were awarded as a component of damages to a former employer against the employer who hired away an employee subject to a restrictive covenant.