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The Fourth Circuit issued an opinion in Messer et al. v. Bristol Compressors International, LLC et. al. that should serve as a cautionary tale to employers planning to use severance agreements when implementing layoffs. There, the court considered three questions. First, whether Bristol Compressors validly eliminated its severance plan before terminating Plaintiffs’ employment. Second, whether certain Plaintiffs who signed a Stay Bonus Letter Agreement (“SBLA”) waived their claims against Bristol Compressors. And third, whether four of the Plaintiffs received adequate notice under the WARN Act before their employment was terminated. …
Continue Reading Fourth Circuit Outlines Pitfalls in Using Severance Plans for Layoffs

On March 22, 2023, the General Counsel of the National Labor Relations Board (NLRB or the “Board”), Jennifer Abruzzo, issued a memorandum providing guidance in light of the NLRB’s recent decision in McLaren Macomb, 372 NLRB No. 58 (2023). As previously reported, the Board in McLaren Macomb held that overly broad non-disclosure and non-disparagement provisions in severance agreements violate employee rights under the National Labor Relations Act (NLRA or the “Act”). The General Counsel’s memorandum—which is directed to the Board’s regional offices over which she exercises supervisory authority—seeks to clarify the scope of the McLaren Macomb decision, including: the types of provisions that may violate the NLRA; language that may be acceptable in light of the decision; whether the decision applies retroactively to previously executed severance agreements; and the potential applicability of the decision to supervisors. The memorandum is not legally binding, but it does give employers a more informed roadmap for how the Board initially will handle unfair labor practice (“ULP”) charges challenging severance agreements.…

Continue Reading NLRB General Counsel Issues Guidance Memorandum Regarding Severance Agreements

Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment. In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.
Continue Reading Ninth Circuit Holds California’s Ban on Mandatory Arbitration Agreements is Preempted by the Federal Arbitration Act

On January 5, 2023, the Federal Trade Commission (“FTC”) issued a notice of proposed rulemaking (“NPRM”) that would “provide that it is an unfair method of competition – and therefore a violation of Section 5 [of the FTC Act] – for an employer to enter into or attempt to enter into a non-compete clause with a worker; [or to] maintain with a worker a non-compete clause . . .”  If this rule becomes final, it would effectively prohibit employers from entering into non-compete agreements—as broadly defined by the proposed rule—with their workers.
Continue Reading The Federal Trade Commission Seeks to Ban Non-Compete Clauses

On December 7, 2022, President Joe Biden signed the Speak Out Act (the “Act”), which limits the enforceability of pre-dispute non-disclosure and non-disparagement clauses covering sexual assault and sexual harassment disputes. The bipartisan Act was previously passed by the Senate and the House of Representatives by an overwhelming majority. …
Continue Reading Speak Out Act Restricts Use of Non-Disclosure and Non-Disparagement Provisions

This year has seen an increase in state legislation addressing noncompetition agreements (“non-competes”). Following Washington, D.C.’s passage of a ban on non-competes in January 2021, Oregon, Nevada, and Illinois undertook revisions to their respective non-compete statutes.
Continue Reading 2021 Mid-Year State Non-Compete Legislative Update

Last month, Washington, D.C. Mayor Muriel Bowser signed the Ban On Non-Compete Agreements Amendment Act of 2020, which becomes effective next week.  This law is a statutory ban on non-compete agreements that has the strength of similar bans in California, North Dakota, and Oklahoma. …
Continue Reading Washington, D.C. Passes One of the Most Robust Prohibitions on Non-Competes in the Country

California is well known for its broad restrictions relating to non-competition clauses applicable to workers. After a recent decision by the Federal Circuit, such notoriety may extend to the patent realm. Employers should beware to not fall into this employment agreement trap.
Continue Reading Employment Law and Patent Law Collide: Federal Circuit Rules that California’s Non-Compete Restrictions Also Limit the Scope of Patent and Invention Assignment Clauses

Earlier today, Eastern District of California Judge Kimberly Mueller granted a preliminary injunction, prohibiting the state of California from enforcing AB 51, which sought to prohibit companies in California from requiring arbitration agreements as a condition of employment. …
Continue Reading California Court Grants Preliminary Injunction Against Law Prohibiting Arbitration Agreements As A Condition of Employment

Restrictive covenants and non-compete agreements are increasingly under attack, this time by the Federal Trade Commission (FTC). Companies rely on these restrictions to protect investment in intellectual property, technology and employees. On January 9, the FTC suggested that employee freedom of mobility trumps all of these legitimate business reasons companies use restrictive covenants and non-compete agreements.
Continue Reading FTC Commissioners Advocate Restrictions on Non-Compete Agreements; Seek Comments on Potential Rulemaking