Non-Compete Cautionary Tale

A recent post on Robinson+Cole’s Manufacturing Law Blog discusses a recent court decision that underscores the need for manufacturers to exercise caution when seeking to impose post-employment restrictions on key employees.

Author Matthew Miklave explains that manufacturers often seek to bind employees to such restrictions (non-compete, non-solicitation and confidentiality obligations) in order to protect customer lists, pricing information and other confidential or “inside” information which gives them a competitive advantage in the market-place.

The case, Oxford Global Resources, LLC v. Hernandez, is an example of why these agreements must be carefully drafted to be effective when needed.

Read the article.




Law Firm Associate Signing Bonuses Take a Dive, Recruiter Finds

Bloomberg Law reports that average signing bonuses for law firm associates have dropped by $10,000 since 2017 partly because salaries have gone up and women are getting less, according to client data compiled by a legal staffing and recruiting company.

The company, Special Counsel, found that the average signing bonus this year so far is about $17,000. One Special Counsel client topped the list with $60,000, compared to a record $90,000 last year, report Bloomberg reporters Sam Skolnik and Madi Alexander.

The vast majority of those receiving signing bonuses were law firm associates. The others were in-house attorneys or law firm counsel or partners, the report adds.

Read the Bloomberg Law article.



New Survey Rates Big Law Policies to Build Gender Equality

A new survey aims to move forward the conversation about equality in Biglaw by examining which firms are taking key steps to close persistent gender gaps.

Bloomberg Law reports on the survey, which was conducted by Diversity Lab, an incubator for diversity and inclusion in the law, and ChIPs, a nonprofit organization focused on advancing and connecting women in technology, law and policy.

Top scoring firms were Brooks Kushman and Sheppard Mullin.

Read the Bloomberg Law article.



Hospital System Fires General Counsel Amid Alleged Compliance Violations

The Broward Health board fired its general counsel Lynn Barrett as the Florida taxpayer-supported health system continues to struggle after a series of state and federal investigations related to alleged overspending, kickbacks and open-government law violations, reports Modern Healthcare.

“Broward Health doctors alleged during Wednesday’s board meeting that Barrett helped cultivate a hostile culture at the South Florida health system, which led to a ‘mass exodus’ of doctors that crippled the organization,” explains reporter Alex Kacik.

Barrett’s dismissal comes amid a controversy over an independent review process led by law firm Baker Donelson concerning a $69.5 million healthcare fraud settlement agreement reached in 2015.

Read the Modern Healthcare article.




Podcast: Dos and Don’ts for Drafting Severance Agreements

In a new podcast, two shareholders in Ogletree, Deakins, Nash, Smoak & Stewart discuss a number of important considerations for employers to keep in mind when drafting a severance agreement.

Milwaukee shareholders Bud Bobber and Brian Radloff offer some practical tips for drafting severance agreements, from how to go about deciding how much to offer an employee to the key terms of the agreement.

The [podcast can be accessed on the Ogletree Deakins website.

Listen to the podcast.



Federal Courts Uphold Arbitration Agreements Via Email

Federal district courts in New York and New Jersey recently turned aside employee attacks on arbitration agreements challenged on the grounds that the employer’s communication of its arbitration policy via email was inadequate, reports the Gibbons Employment Law Alert.

“The courts in both Lockette v. Morgan Stanley and Schmell v. Morgan Stanley held that the employees’ assertions that they never saw the email forwarding the terms of the arbitration agreement were insufficient to overcome the employer’s evidence that the email had been delivered to the employees’ email inboxes,” explains Richard S. Zackin.

But employers must keep in mind that they must comply with relevant state contract law, cautions Zackin.

Read the article.




How Should Managers Deal with the Challenges of Building an Inclusive Workplace?

James L. Heskett, a Harvard Business School professor emeritus, reports on some of the responses to a recent column about how best to foster a climate of inclusion in an organization.

In his original column, the author discussed how diversity and inclusion are universal topics among executives. One typical study looking at the issue found “a strong correlation between gender diversity and a company’s bottom line.”

Companies in the top quartile of gender diversity worldwide had a high likelihood of outperforming bottom-quartile industry peers in both earnings before interest and taxes as well as longer-term value creation, according to the study.

Read the article.



Argument Preview: How Should Courts Decide If Parties to an Arbitration Contract May Aggregate Their Claims?

SCOTUSblog reports that in Lamps Plus Inc. v. Varela, the U.S. Supreme Court will decide whether the U.S. Court of Appeals for the 9th Circuit correctly held that an employer consented to class arbitration.

The employer in that case included language in the arbitration contract that committed the parties to use arbitration “in lieu of any and all lawsuits or other civil legal proceedings,” specified that arbitral claims include those “that, in the absence of this Agreement, would have been available to the parties by law,” and authorized the arbitrator to “award any remedy allowed by applicable law.”

Lower courts have found that the arbitration agreement could be read to authorize class arbitration, and that California contract law called for ambiguity on that point to be resolved against the contract’s drafter, Lamps Plus, writes Charlotte Garden.

Read the article.




Contract Case: Lack of Consideration – Or Not!

Money-payment-cashWriting in ContractsProf Blog, Myanna Dellinger discusses a case that “nicely demonstrates how the consideration doctrine is still relevant and, as always, the importance of getting contracts in writing even though they do not have to be.”

The plaintiff had agreed to do some work for the defendant for $10 an hour, with the understanding that he would receive a $150,000 bonus after nine months. Somewhere along the way, the employer gave him a raise to $11, and then, after a total of 18 months of labor, fired him and refused to pay the bonus.

Dellinger explains that the court apparently found that because the plaintiff actually received one single dollar more per hour over nine months, there was no consideration for the original promise of working for a “reduced salary.”

Read the article.




Google Exec Clouded by Scandal is a Veteran Silicon Valley Counsel

David Drummond, the  chief legal officer of Google parent Alphabet Inc. and a one-time Wilson Sonsini Goodrich & Rosati partner, was cited in a New York Times report about the allegedly lax approach that Google has taken to relationships between supervisors and their subordinates.

Bloomberg Law focused  on the part of the report that detailed an alleged extramarital affair involving Drummond and a subordinate, an in-house senior contract manager at Google. The affair resulted in the woman giving birth to Drummond’s child, the Times reported.

“The report, which cited [Jennifer] Blakely and other Google employees, said she and Drummond had a son in 2007,” Bloomberg reports. “Thereafter, it said, Drummond disclosed the relationship to the company—and Blakely was asked to leave because relationships between managers and subordinates were ‘discouraged.’”

Read the Bloomberg Law article.




Spotlight on No-Poach Agreements Continues, Expands to New Industries

Employment contractSome state attorneys general and the U.S.  Department of Justice are looking into no-poach agreements that some companies are including in their franchise operating agreements, reports Skadden, Arps, Slate, Meagher & Flom.

“Such clauses typically prohibit franchisees from hiring employees directly from the franchisor or other franchisees for up to six months following the end of their employment. [Washington State Attorney General Bob] Ferguson has been touting the ongoing success of his investigation with respect to fast food chains, and franchise-based chains in other industries appear to be his next target,” according to the authors.

“Any employers that currently utilize no-poach agreements or are considering doing so should be sure to examine whether there are valid pro-competitive justifications for the agreement that outweigh any anti-competitive effect and whether the benefits of the no-poach agreement are worth the risk of the potential governmental or private challenge that is likely to occur.”

Read the article.



Nov. 8 Live Event: General Counsel and Experts Share New Drivers of Diversity

Bloomberg Law’s 4th annual Talent and Diversity Forum brings together industry leaders to share insights on what can actually increase diversity in the legal industry.

The event will be November 8, 2018, 8 a.m. to noon, in the offices of Bloomberg Government, 1101 K Street, NW, Washington, DC 2005.

With the emergence of new technologies and increased data analysis, the industry has seen significant shifts in recruiting and retention strategies and the emergence of an operations and value-driven business model, Bloomberg says on its website.

The half-day program will bring together corporate diversity champions, general counsel, and industry experts to offer up the newest ideas for bridging the ongoing diversity gap, from using technology to analyze data on prospective attorneys to ways to adapt an organization’s overall diversity initiatives to best suit an in-house legal team.

Key topics will include:

  • Harnessing diversity in the changing business of law
  • Using data and technology to increase diversity
  • Workshopping scenarios to tackle diversity issues

Request an invitation.




Biglaw Firm Admits It Botched Handling of Sexual Assault Allegation Against a Partner

Above the Law reports that Baker McKenzie released a joint report last week that admits the way the firm handled the alleged sexual assault by a partner at the firm involved “a number of shortcomings … which we very much regret.”

A partner in the firm’s London office was accused of assaulting an associate after a firm event six years ago, recalls Above the Law editor Kathryn Rubino. “The associate reported it to the firm, and they investigated. But instead of getting rid of the offending partner, the firm just sanctioned him and reached a settlement with the associate who was victimized. It was only after the story became public that the firm bowed to pressure and the accused partner left the firm.”

Read the Above the Law article.



Recent Oil and Gas Verdict Highlights Importance of FLSA Compliance

A recent case from the United States District Court for the Western District of Pennsylvania highlights how expensive a Fair Labor Standards Act case can be when an employee prevails for unpaid overtime compensation, writes Jay Carr in Vorys, Sater, Seymour and Pease’s Energy & Environmental Law Blog.

The article describes Sammy Mozingo v. Oil States Energy Services L.L.C., in which oil field workers in Texas filed a class action alleging that their employer Oil States had misclassified them as exempt from overtime laws. Most of the employees settled, but eight went to trial, resulting in Oil States paying damages, fees, and costs totaling $3,385,884 for just these eight employees.

Read the article.




Contracting Around Class Actions, a Win for Employers

A recent Ninth Circuit ruling that Uber’s arbitration agreements did not violate the National Labor Relations Act provides a major victory to Uber by requiring each plaintiff to separately arbitrate his or her claims.

Christine M. Fitzgerald, writing in the Jackson Lewis California Workplace Law Blog, explains that plaintiffs filed a putative class action against Uber for failure to remit gratuity paid by customers, and for misclassification of the drivers as independent contractors and failing to pay their business expenses. The O’Connor plaintiffs sought an order declaring Uber’s 2013 arbitration agreements unconscionable.

The panel rejected plaintiffs’ argument that the lead plaintiffs constructively opted out of arbitration on behalf of the entire class.

Read the article.



Biglaw Practice Leader Encourages Women to Tell Him If They Plan on Becoming Pregnant – For ‘Budgetary Reasons’

PregnantAbove the Law reports that women in the Jones Day Business and Tort Litigation group have been “encouraged” to tell management if they were pregnant or planning on becoming pregnant within the next year.

ATL executive editor Elie Mystal writes:

We’re told that partner Stephen Sozio, who is co-leader of the firm’s health care practice and chair of the firm’s litigation department in Cleveland, added that he understood if women who were in their first trimester were uncomfortable talking to him. He encouraged those women to contact his administrative assistant and tell her about their plans.

The women were told that the information would help the group plan its budget.

Read the Above the Law article.



China Contracts: Not Quite Legal Usually Means 100% Illegal

Dan Harris of Harris Bricken, LLP, writing in China Law Blog, updates his earlier discussion of the dangers of relying on China employment contracts that split the salaries of expatriate employees working in China.

He explains that Chinese company employers may hire expats with the promise that they will get paid 30 percent in China and 70 percent in Hong Kong or some other country, and then the worker never gets the 70 percent.

“Both you and them are engaging in tax fraud but all that should matter for you is that you are engaging in tax fraud — assuming your employer actually pays you outside China, which they often do not,” Harris writes.

The takeaway is that a less than fully legal, truly enforceable contract is no contract at all.

Read the article.



Overqualified? Or Too Old? Ex-GC’s Age Discrimination Case Takes Aim at Biased Recruiting Practices

The Chicago Tribune tells the story of a former general counsel who had been unemployed and job hunting for three years when he came across a position that seemed promising, but for this part of the ad: “3 to 7 years (no more than 7 years) of relevant legal experience,” it said.

The story of Dale Kleber, who was 58 at the time, illustrates a bigger story of the critical question about whether job applicants can pursue lawsuits at all in such cases, explains reporter Alexia Elejalde-Ruiz.

“The federal Age Discrimination in Employment Act prohibits discrimination against people over 40, but there is dispute about whether Congress intended for the law to protect external job applicants, not just current or former employees, against policies that appear to be neutral but have a disproportionate adverse effect on older people,” she writes.

Kleber’s experience includes a stint as general counsel at Dean Foods and, most recently, as CEO of a dairy products trade group.

Read the Chicago Tribune article.



Biglaw Firm Reverses Course on Associate Raises, Now With $190,000 Starting Salary

pay-salary-income-statisticsFish & Richardson has “reassessed” its earlier decision not to give raises to associates and now has reversed course and will set starting salaries for associates at $190,000, reports Above the Law.

According to the firm-wide email, the powers that be at Fish ‘continued to monitor market conditions’ and ‘listened to the reactions of associates throughout the Firm’ and whaddaya know, and they’ve ‘reassessed’ their position. Turns out hitting the $190,000 mark for starting associate salaries is good business,” writes editor Kathryn Rubino.

Seventh-year associates can look forward to salaries of $325,000 on the new scale.

Read the Above the Law article.




Federal Appeals Court Rules Uber Can Force Drivers Into Individual Arbitration, Voids Class-Action

UberA federal appeals court Tuesday ruled that Uber can force its drivers into individual arbitration over pay and benefit disputes, voiding an effort by thousands of drivers to join in a class-action suit against the ride-hailing company, according to the Los Angeles Times.

The U.S. 9th Circuit Court of Appeals in San Francisco overturned a lower-court order that had certified the drivers’ class-action effort.

The court’s opinion cited a 5-4 U.S. Supreme Court decision in May that employers could enforce arbitration agreements that require workers to give up the ability to collectively pursue claims that they were shortchanged or treated unfairly.

Read the LA Times article.