Laborsphere

California Non-Compete and Trade Secret Catch-Up

Non-Competes

California is notorious in the non-compete world for its prohibition and extreme scrutiny of individual non-compete and other types of restrictive covenant agreements. These types of agreements between two businesses, however, have received less attention.

In August, the Supreme Court of California in Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 573 (Cal. 2020), examined an agreement between two businesses and found “that a rule of reason applies to determine the validity” of business-to-business non-compete agreements. While some commentary on Ixchel has examined the validity of business-to-business non-compete agreements, the larger focus of the Ixchel case was “whether contractual restraints on business operations or commercial dealings are subject to a reasonableness standard under [California Business and Professions Code] section 16600.” Id. at 581 (emphasis added). It is important to note that the Ixchel court reiterated California’s strong position that agreements not to compete related to the termination of employment are invalid and not subject to a reasonableness test. Id. at 583-584. The Ixchel court adopted the reasonableness standard from the Cartwright Act (California’s antitrust law which generally assesses whether an agreement promotes or suppresses competition) for application to business-to business non-competes and further stated that its decision potentially affects all California contracts “that in some way restrain a contracting party from engaging in a profession, trade, or business.” Id. at 581, 588.

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Will Remote Work Outlast COVID-19?

In the last eight months, we’ve all become used to working from home, and remote work is likely to remain prevalent for many workers moving forward. The media keeps reporting that some firms have no plans to return to the office. Some companies are planning not to renew their leases and move to full-time remote working.

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Potential Changes to Labor Policy Under a Biden Administration

Employers should anticipate major changes to national labor policy when President-elect Joe Biden assumes the Oval Office. Through a combination of legislation and revisiting Trump-era NLRB decisions, the incoming administration will likely seek to increase union membership by facilitating organization, shortening election periods and reducing the bargaining period for the first collective bargaining agreement.

For the full alert, visit the Faegre Drinker website.

Colorado Passes Paid Family and Medical Leave Law

Starting on January 1, 2024, Colorado employees will be entitled to take 12 weeks of paid family and medical leave as a result of the passage of Colorado Proposition 118, the Paid Medical and Family Leave Initiative. Employees will be able to take an additional four weeks of paid leave in connection with pregnancy or childbirth complications. The paid leave will be funded through a payroll tax shared equally by employers and employees, starting on January 1, 2023.

For the full alert, visit the Faegre Drinker website.

DOL Finalizes Rule Requiring Internal Approval of Evidence Prior to Issuing Preliminary Notices of Discriminatory Bias Claims Against Contractors

Contractors have more clarity on the Office of Federal Contract Compliance Programs (OFCCP) investigation into discriminatory bias claims, as a final rule is published outlining consistent parameters and approval protocol for evidence. These new developments should equip contractors with additional information prior to the agency issuing a Notice of Violation, allowing contractors an opportunity to refute any initial determination made by the OFCCP or seek prompt resolution.

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Civil Rights Organizations File Lawsuit Seeking to Halt President Trump’s Executive Order Combating Race and Sex Stereotyping

The controversy surrounding President Trump’s “Executive Order on Combating Race and Sex Stereotyping” continues to snowball. After the U.S. Chamber of Commerce and 150-plus business organizations sent a letter to the president contesting the Order and requesting that it be withdrawn, NAACP attorneys took contractor objections a step further, launching a class action lawsuit on behalf of the National Urban League, the National Fair Housing Alliance and others similarly situated. Filed on October 29, 2020, the suit called the Order “an extraordinary and unprecedented act by the Trump Administration to undermine efforts to foster diversity and inclusion in the workplace” and further challenged the federal directive on constitutional grounds.

For the full alert, visit the Faegre Drinker website.