Just before the holiday break, Congress passed the Tax Cuts and Jobs Act (H.R. 1), which was signed into law by President Trump on December 22, 2017. Although the far-reaching implications of the new tax law won’t be fully realized for some time, there are several noteworthy provisions that will impact employers immediately.
In this tenth article in the continuing series “The Restricting Covenant,” I discuss non-competition issues that arise in the orthopedic medical device industry.
I would venture to say that, in the past 20 years, the orthopedic medical device and equipment industry is at the top of the charts for high-stakes litigation and precedent-setting rulings with respect to non-competition and non-solicitation disputes. Many orthopedic medical device and equipment companies have sued each other and their former employees, sales representatives, independent contractors, vendors, consultants or distributors for violating the terms of their restrictive covenants. These companies have sought injunctive relief and money damages.
*Originally published by CalCPA in the January/February 2018 issue of California CPA — the original article can be found here.
You may not have expected that the California Legislature in 2017 designated an official state dinosaur (Augustynolophus morrisi) and four state nuts (almond, pecan, walnut and pistachio), which are technically seeds, but that’s a separate article. Less surprising is that employer regulation and employee rights continue to expand in our state, the sixth-largest economy of the world. The rate of expansion, however, seems to have taken another pendulum swing: 304 bills introduced in 2017 mention “employer,” compared to 569 bills in 2016 and 224 in 2015. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of several bills that became law affecting private employers, effective Jan. 1, 2018, unless noted otherwise, follow.
Cheryl Orr and Phil Lebel wrote an article for Risk & Compliance magazine titled “How Can Employers Respond to Increased Risks of Well-Funded Harassment Litigation Stemming from the #MeToo Movement?” They discuss the recent uptick in sexual harassment allegations in the wake of the #MeToo campaign, which began following allegations against producer Harvey Weinstein in October 2017.
Cheryl and Phil highlight litigation finance and funding firms that have invited individuals who believe they have been victims of sexual harassment in the workplace to share their stories, seek legal representation, and, in some cases, receive “angel” litigation funding. They state that “[i]f this is, in fact, the beginning of a groundswell of harassment claims, the impact to employers could be tremendous. An increase in sexual harassment claims…could mean rising litigation expenses. Moreover, in the current social and political climate, verdicts could be increasingly unpredictable as juries attempt to ‘correct’ larger social problems by punishing employers who are found liable.” The article also notes that lawmakers in several jurisdictions are facing voter pressure to address the perceived shortcomings in the current legal framework, as applied to sexual harassment cases.
As allegations of sexual misconduct continue to surface almost daily against high-profile individuals, some legislators have responded by proposing legislation curtailing the use of non-disclosure (NDA) and confidentiality agreements. Critics have opined that such agreements (particularly as used by Harvey Weinstein) have enabled victimizers to conceal and continue long-running patterns of sexual misconduct, in that they prevented discussion of the accusations among both the victims and others, such as co-workers, who knew of the victimization.
In October, California State Senator Connie Leyva announced that she would introduce “legislation to ban secret settlements (confidentiality provisions in settlement agreements) in sexual assault, sexual harassment and sex discrimination cases” when the California Senate reconvenes in early January 2018. On November 15, Pennsylvania State Senator Judy Schwank stated in a press conference that she would introduce a bill that prospectively bans contractual provisions “prohibit[ing] a person from revealing the identity of a person who committed sexual misconduct” and voids any such provisions entered into under duress or incapacity, or by a minor, prior to the law’s enactment.
Governor Jerry Brown signed several laws in 2017 that will impact California employers next year. A summary of some of the key new laws follows, in numerical order by Assembly Bill (AB) and/or Senate Bill (SB). All of the laws outlined below are effective beginning January 1, 2018.