As non-competition laws and the scrutiny of non-compete agreements continue to be in the spotlight, several states are revisiting their non-compete laws. Colorado has been in the spotlight after the Colorado Legislature passed S.B. 21-271 on July 6, 2021 in an effort to reform the sentencing provisions related to numerous petty offenses and misdemeanors. As a result, several Colorado laws related to labor and employment are affected, including Colorado’s statute addressing restrictive covenant agreements, C.R.S. § 8-2-113.
Under C.R.S. § 8-2-113, it is unlawful to: intimidate workers in order to limit their ability to engage in lawful work; and enter into covenants that restrict trade, such as non-compete and non-solicitation agreements, unless the covenants fit within limited exceptions provided under the statute. The penalty if convicted for violating the non-compete statute is currently a misdemeanor punishable by a fine between $10–$250, or jail time of not more than 60 days, or both. C.R.S. § 8-2-115. Effective March 1, 2022, the penalty for violating the non-compete statute will be increased to a class 2 misdemeanor punishable by up to 120 days in jail, or a fine of up to $750, or both, as a result of the changes from S.B. 21-271. S.B. 21-271 also amends the text of C.R.S. § 8-2-113 to include the increased penalty as a new subsection (4).
Continue reading “Several States are Increasing Penalties for Enforcing Non-Compete Agreements”
Companies with Illinois employees have been bombarded with class action lawsuits under the Illinois Biometric Information Privacy Act (BIPA) over the last several years. These lawsuits generally allege that employers have not complied with BIPA’s notice and consent requirements before collecting or disclosing employees’ biometrics. One of the defenses has been that such claims are preempted under the Illinois Workers’ Compensation Act (IWCA) as workplace injuries, and thus cannot be brought in court. However, on February 3, 2022, in a long-awaited decision, the Illinois Supreme Court held in McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, that preemption does not apply to BIPA claims raised by employees for damages, thereby allowing such claims to proceed in court.
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On December 15, 2021, the First District of the Illinois Appellate Court decided a heavily litigated issue under the Illinois Biometric Information Privacy Act (BIPA): When does the statute of limitations to file suit under BIPA start to run? In more technical terms, when does a claim accrue under BIPA? In the first appellate court decision addressing this issue, Watson v. Legacy Healthcare Financial Services, LLC, the court held that BIPA claims accrue each time an entity captured biometrics in violation of BIPA.
The plaintiff in Watson brought a putative class action lawsuit under BIPA in the Circuit Court of Cook County, Illinois, alleging that the defendant did not comply with BIPA’s multiple procedural requirements in deploying a so-called biometric timeclock that scanned employees’ fingerprints or handprints. The trial court held that the statute of limitations for plaintiff’s BIPA claims was five years — a conclusion mostly consistent with a subsequent appellate court decision on this issue. It also concluded that plaintiff’s claims accrued with the first alleged biometric scan. Since plaintiff’s initial scan occurred more than five years before he filed suit, the court held his suit was time-barred.
Continue reading “Illinois Appellate Court Specifies BIPA Accrual of Statute of Limitations”
On September 17, 2021, the First District of the Illinois Appellate Court — which covers appeals from Cook County, Illinois — addressed a hotly contested issue under the Illinois Biometric Information Privacy Act (BIPA): which statutes of limitations apply to BIPA claims? In Tims v. Black Horse Carriers, Inc. (2021 IL App (1st) 200563), the court concluded that a five-year limitations applies to some BIPA claims and a one-year limitations period applies to others.
There is no statute of limitations in BIPA which has led to litigation over which limitations period under Illinois law should apply to BIPA claims. In Tims, the plaintiff, a former employee of defendant, filed a class action complaint alleging that defendant did not comply with certain BIPA provisions in connection with its so-called biometric time clocks. The defendant moved to dismiss, arguing these claims were untimely under Illinois’ one-year limitation period for “slander, libel or for publication of matter violating the right of privacy” under 735 ILCS 5/13-201. The trial court denied the motion, concluding instead that the Illinois “catch-all,” five-year limitation period under 735 ILCS 5/13-205 for “all civil actions not otherwise provided for” applied to the plaintiff’s BIPA claims.
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Last week, the United States Equal Employment Opportunity Commission (EEOC) firmed up its guidance to employers regarding mandatory COVID-19 vaccinations. Subject to certain restrictions and potential accommodation requests, the EEOC’s position is that employers may require employees to be vaccinated before returning to the workplace. Still, employers considering administering the vaccine, either directly or through a third party, should proceed with caution.
For the full alert, visit the Faegre Drinker website.
The global coronavirus pandemic has had a multitude of effects on how employers conduct business and manage their workforces. But as employees start to return to work, employers must be mindful of how to address those who leave and potentially violate their noncompetition agreements. As we settle into the “new normal,” the Restrictive Covenant team with Faegre Drinker’s Labor & Employment group has identified four considerations for employers seeking to enforce restrictive covenants and protect trade secrets.
Continue reading “Top Four Considerations for Employers Seeking to Enforce Restrictive Covenants During a Global Pandemic”