Recent case law and enforcement actions have made clear, contractual language addressing the issue of exclusivity, while obviously relevant, is not always determinative, write E. John Steren and Patricia Wagner for Epstein Becker & Green’s Antitrust Byte blog.

The authors explain: “Instead, and regardless of the contractual language between the parties, the courts and enforcement agencies look at whether the parties operate, in practice, as if the relationship is exclusive or not. Regarding network participation, the enforcement agencies will look at whether competing networks exist and whether network members actually participate in those competing arrangements. For payor contracts, the enforcement agencies will look at whether payors actually contract with competing providers—and if not, why not.

Read the article.

A recent article published by Goodwin Procter describes a Department of Justice challenge to an agreement between two of the largest rail equipment suppliers in the world that prohibited them from competing to hire each other’s employees, often referred to as “no poach” or “no hire” agreements.

“The negotiated settlement requires the Defendants to cease participation in these agreements and imposes a slew of onerous compliance obligations to assure no conduct of this sort occurs in the future,” according to the article. “This is a notable harbinger of the DOJ’s future enforcement intentions. Companies with any such agreements with competitors – be they written or informal – should consult with counsel immediately to assess their potential exposure. Agreements that are reasonably necessary to achieve a legitimate business transaction or collaboration between or among companies remain lawful.”

Read the article.

Dan Harris of Harris Bricken’s China Law Blog writes that when foreign companies sign dual language contracts without knowing exactly what the Chinese language portion of their contract says, they are engaging in risky business.

He explains: “Many dual language Chinese-English contracts are silent on which language controls. For some unknown reason, foreign companies far too often just assume that the English language portion controls or they just assume that it does not matter because the meaning of both the English and the Chinese portions is exactly the same. Wrong, wrong, wrong.”

He writes that Chinese companies love using a contract with an English portion that is more favorable to the foreign company than the Chinese portion and then relying on the English speaking company to assume that the English language portion will control.

Read the article.

Conga and Forrester have published a new report titled “Best Practices: Uncover the Full Potential of Your CLM Implementation.” The report on contract lifecycle management can be downloaded from Conga’s website at no charge.

In promoting the report, Conga makes three points:

1. Customers are leaving money on the table by not fully implementing CLM. Fewer than one in five of all CLM customers interviewed captures all the strategic values a CLM implementation can bring.
2.  Engage early with stakeholders and manage their expectations. It’s critical to start working with general counsel and other key stakeholders early when developing a business case. Having a holistic plan that ties benefits to stage and to stakeholder will keep the implementation on track.
3. Have a solid and funded business case that drives the later stages of implementation. More than 70 percent of CLM customers interviewed stopped at stage 2 of the implementation. Having funds, resources, and support enables the latter stages of CLM optimization.

Download the report.

Agreements among companies to not hire each other’s workers are more risky than ever, warns Pepper Hamilton LLP in a post on its website.

“The DOJ’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, stated on January 19 that the division has criminal cases targeting these agreements in the works,” the post says. “Meanwhile, lawsuits challenging no-poach agreements in technology, entertainment, health care and other industries have settled, sometimes for hundreds of millions of dollars. The DOJ announced its latest settlement, a civil settlement with two rail equipment suppliers, on April 3, underscoring that it did not bring criminal charges only because the suppliers ended their agreements before the FTC and DOJ issued guidance on ‘no-poach’ agreements in October 2016.”

The article concludes with some actions that firms should take to identify and limit their exposure.

Read the article.

Business News Daily talked to business owners, attorneys and other experts to find out what common contract “gotchas” you should be on the lookout for.

The article, by Adam C. Uzialko, starts by warning about the use of terms like “notwithstanding,” which can contradict a party’s previously stated obligations.

Other topics include intellectual property clauses, last-minute revisions, specific accounting practices, automatic-renewal clauses, financial obligations, forum selection clauses, foreign laws, at-will clauses, and client acquisitions.

Read the article.

Image by NY Photographic

Sinclair Broadcast Group, a company that owns local news stations across the country, is itself in the news for requiring its newscasters to read a script about “one-sided news stories plaguing our country.”

The Conversation reports that some Sinclair employees have said that their employment contracts made it prohibitively expensive to walk away.

Elizabeth C. Tippett, associate professor of law at the University of Oregon and author of the article, offers her take on the issue: “A Los Angeles Times journalist posted an excerpt of a contract that he claims to have received from a Sinclair employee. After reviewing it, I agree with other attorneys who noted that the legality of the provision depends on whether the fine is similar to the costs Sinclair would incur if the employee leaves prematurely.”

Read the article.

Fox Rothschild LLP has posted its Federal Contractors’ Guide to Small Business Administration Set-Aside Contracts, Size Standards, Size Protests, and Affiliation.

The federal government sets aside a significant portion of its procurement dollars each year for purchasing goods and services from small businesses. Small business set-aside procurements and small business contract awards (“Set-Aside Procurements” and “Set-Aside Contracts,” respectively) provide substantial opportunities for a certified small business concern (SBC) to compete for and perform federal contract work. However, SBCs awarded Set-Aside Contracts are frequently subjected to size protests filed with the U.S. Small Business Administration (SBA) by disappointed competitors looking to challenge the awardee’s size, and if successful, to disqualify the awardee from the procurement.

The Fox Rothschild LLP Guide advises federal contractors on the following issues and concepts:

●SBA Set-Aside Procurements, Set-Aside Contracts, and Size Standards;
●The parameters and purposes for SBA size protests, how they are filed, and how contractors can avoid and defend against such protests; and
●The parameters of SBA affiliation, which contractors can use to challenge Large Businesses masquerading as small business concerns, and, as importantly, must understand to protect themselves from being adversely affected by a finding of affiliation at the hands of a size protest.

Download the guide.

An article in Gray Reed & McGraw’s Texas Construction Law Blog offers some steps cleaning and restoration professionals can take in an effort to minimize the damage from a payment dispute with a client after a natural disaster.

Authors Russell Jumper and Tim Fandrey point out the importance of having a form agreement specific to natural disaster mitigation and remediation ahead of time.

Other points discussed in the article are the agreed scope of the project, making sure insurance proceeds go to the contractor, keeping the client or insurer from taking an estimate to a competitor, and being prepared for litigation.

Read the article.

Daniel Schwartz, writing for Shipman & Goodwin’s employment law blog, provides a handy list of typical provisions in a separation agreement between an employer and an employee.

He prefaces the list with a caveat: His description of a “typical” agreement does not mean that these provisions are in every agreement or even that these provisions ought to be in some agreements. Each separation or settlement has differing facts that may make certain provisions more important than others.

Some of provisions on the list include nondisparagement of one or more of the parties, return of property, and benefits upon separation of employment.

Read the article.

Employers large and small are committed to taking action to pursue expanded diversity and inclusion in their workforces through the use of a contract provision known as an “inclusion rider,” points out Don Lawless in a post in Barnes & Thornburg’s Hot Topics in Employment Law blog.

“Consideration of gender, race, or national origin in pursuit of diversity is a legal two-way street,” he warns. “If goals are applied like quotas, it creates the possibility of reverse discrimination claims by qualified and interested job candidates who are not considered because they will not help meet the established metrics.”

The article states that sophisticated employers have used established goals as a tool toward implementing equal employment opportunity objectives, steering clear of applying goals like quotas.

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Although non-disclosure agreement negotiations may seem like a perfunctory step in the M&A process, NDAs present many issues that buyers and sellers should carefully consider before escalating discussions and venturing further toward a deal, according to a post by Faegre Baker Daniels.

Lance Bonner and Kate Sherburne explain: “Unlike confidentiality agreements in other commercial transactions, NDAs negotiated at the onset of the M&A process are often non-mutual and only bind the buyer with respect to the seller’s confidential information. As a result, negotiating an NDA typically begins with a form prepared by the seller or its investment bank or their respective legal counsel. Key negotiation points will vary depending on the characteristics of the proposed transaction and relationship of the parties.”

The authors discuss the areas that are commonly important, including confidential information, exclusions, representatives of the buyer, access to employees, suppliers and other business relations, non-solicitation, and more.

Read the article.

When considering an arbitration clause in a contract, one must always bear in mind the “separability” or “independence” of the arbitration agreement — the autonomy principle, writes Narges Kakalia in the ADR: Advice From the Trenches blog of Mintz Levin.

She asks: “For example, should a plaintiff be compelled to arbitrate a dispute if the contract containing the ADR clause has expired? What if the contract containing the arbitration clause is unconscionable as a matter of public policy? A plaintiff may nonetheless be compelled to arbitrate in order to resolve his dispute, as illustrated recently in a decision by the U.S. District Court for the Northern District of Texas.”

She discusses Athas Health, LLC v. Giuffre and explains how the court reached its decision.

Read the article.

PilieroMazza PLLC has posted an on-demand video discussing how businesses can proactively get out in front of pre-bid issues and avoid missteps.

“We often see what can go wrong in the bidding and procurement process long after a client submits a proposal or is awarded a contract,” the firm says on its website. “From awards challenged because companies did not confirm their set-aside status, to incorrect assumptions made about the cost of labor, mistakes made before you bid can be costly, and even devastating.”

Topic include:

• The general requirements of the BAA and TAA
• The applicability of the requirements and exceptions to their applicability
• Tests for determining a product’s country of origin
• Relevant FAR clauses and certifications
• The potential penalties for non-compliance
• Practical tips and strategies for compliance

Watch the on-demand video.

The State Department will be improving transparency in its requirements for contractor cooperation with its Office of Inspector General, according to Federal News Radio.

“While the Foreign Affairs Manual authorizes the OIG to access a contractor’s documents and interview its employees during the scope of an investigation, that provision is not currently explicitly expressed in the contracts signed by vendors,” writes David Thornton. “The OIG and the department are moving to correct this issue, and hopefully head off any further confusion or misunderstandings.”

The change is intended to head off problems such as the one seen earlier this year when a contractor would not comply with requests for an IT audit of security controls.

Read the article.

In a client alert, Pepper Hamilton surveys the effects of incorporating an arbitration provider’s rules or common arbitration provisions on who determines questions of arbitrability.

“While questions of arbitrability are ordinarily decided by a court, contracting parties can agree to delegate questions of arbitrability to an arbitrator instead,” the alert explains. “Because an arbitrator deciding questions of arbitrability is contrary to the ordinary course of events, contracting parties must express their intent to delegate questions of arbitrability to an arbitrator ‘clearly and unmistakably.’ When doubt exists as to the parties’ intent to ‘arbitrate arbitrability,’ the FAA’s presumption in favor of arbitrability is reversed.”

The authors conclude: if you want a court to decide whether, and to what extent, your dispute is subject to arbitration, you must be mindful of the impact that incorporating an arbitration provider’s rules or a broad arbitration provision into your agreement can have on the question of who will decide arbitrability.

Read the article.

A post by Jason M. Knott in the Zuckerman Spaeder Suits By Suits blog warns that, when an employer changes its contract with an employee, the change should be communicated clearly—and preferably, in writing. Otherwise, the employer may be at risk of finding that the old terms still control.

He illustrates his point by discussing the case of Balding v. Sunbelt Steel Texas, Inc., in which a federal court of appeals ruled that an employer had to go to trial over a salesman’s claim for unpaid commissions.

In that case, the salesman’s original contract set out a salary and a percentage commission. Later the employer raised his salary and claimed that the salesman was told that the raise was in lieu of commissions, but the salesman denied hearing that statement.

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When indemnity is mentioned, most owners, designers and contractors think of protection from third party claims asserted by parties with whom they have no contractual privity, points out a post by Saul Ewing Arnstein & Lehr.

But Garry R. Boehlert and Trevor Ashbarry explain that, depending on the language used, indemnity provisions also can cover first party claims asserted by parties in privity of contract. To the surprise of many, such clauses may cover actions for breach of contract in addition to claims for negligence.

They add, “regardless of how carefully you may have considered the pros and cons of including a prevailing party clause in your contract, the indemnity clause you have negotiated may unwittingly permit recovery of attorneys’ fees for first and third party claims — even if the clause makes no mention whatsoever of attorneys’ fees.”

Read the article.

Technology is revolutionizing nearly every aspect of contracts, from how they are generated to how they are terminated. In some cases, contract tech is beneficial – but in other cases, as with the Internet of Things (IoT), tech is making contracts more and more difficult to analyze,  according to IoT Business News.

“Many experts believe that contract law isn’t prepared for the IoT revolution, which is dangerous considering the abundance of IoT devices already in operation,” the article says. “Businesses and consumers alike should be aware of concerns regarding contracts and the IoT, so everyone can stay protected in the years to come.”

The article defines a contract in the age of IoT and discusses how the IoT has changed contracts.

Read the article.

Poorly drafted waivers include lawyerly language that may appear concrete on the surface but crumbles during a lawsuit, warns Hellmuth & Johnson in a blog post.

Authors Micheal D. Howard and Jason S. Raether describe a recent case involving a fitness studio  that demonstrates how a poorly drafted waiver can be as effective as having no waiver at all.

In the case, involving an injury to the customer of a fitness studio, a trial court found in favor of the studio, based on the language of an indemnity agreement. But the appellate court reversed, finding the language to be inadequate.

Read the article.