With 2020 finally in our rearview mirror, we can begin to look ahead to a promising and prosperous 2021. As the cloud of COVID-19 starts to lift (thanks to several vaccines), we expect employers will slowly begin to reopen their offices, employees will travel more, and the job market may revert back to the low unemployment levels that predated the onset of COVID-19 in March 2020. The ever-changing landscape of restrictive covenants certainly could affect all of this employment-related activity, including non-competes and non-solicits. Here are our early predictions for the Top 3 hot-button issues to look out for in the coming year.
Starkey v. Roman Catholic Archdiocese of Indianapolis has been appealed. We expect the Seventh Circuit will soon have the opportunity, post-Bostock, to weigh in on the intersection of Title VII’s sexual orientation and gender identity protections and its religious organization exception, related to a religious organization’s employment decisions. This could foreshadow future disputes and court rulings in this developing area of the law.
For the full alert, visit the Faegre Drinker website.
Most of the action in restrictive covenant cases occurs in the beginning of the litigation at the temporary or preliminary injunction stage when a company seeks to stop someone from doing something immediately. However, after the dust settles and the case moves forward to discovery and trial, money damages often take center stage. There are different types of monetary relief that might be available to a company that is harmed by a former employee’s unlawful competitive conduct – compensatory, liquidated, equitable, or punitive, to name a few. This edition of The Restricting Covenant Series discusses a potentially potent form of equitable monetary relief in restrictive covenant and duty of loyalty cases – disgorgement of an employee’s compensation based on that employee’s competitive and disloyal conduct.
Continue reading “Part 27 of the “The Restricting Covenant Series”: Disgorgement”
The global COVID-19 pandemic continues to impact employers and their employees’ work activities in a variety of ways. Millions of workers have been terminated, laid off or furloughed. Companies have shifted to remote workforces either partially or completely. Courts around the country continue to grapple with suspended or stayed proceedings. This pandemic is presenting some unique challenges and complications to many areas of the law, including restrictive covenant law, as discussed in this COVID-19-themed edition of The Restricting Covenant Series.
The most recent installment of the Restricting Covenant Series was inspired by the Jeopardy! tournament “The Greatest of All Time,” where champion Ken Jennings edged out two other competitors to win the million-dollar prize. So, for the crossword and quiz show enthusiasts, here is the clue in the form of an answer (and the subject of this article): This 17-letter word means to cut out the middleman in connection with a transaction. Correct response: What is “disintermediation”? What does disintermediation have to do with noncompete agreements? Read on.
There are many notable east coast-west coast rivalries. In sports (Celtics versus Lakers basketball), in leisure (Atlantic versus Pacific beaches), or in food (Shake Shack versus In-N-Out Burger), to name a few. With respect to restrictive covenants, the conflict between Delaware, which is generally considered a “pro-enforcement” jurisdiction, and California, which is generally considered an “anti-enforcement” jurisdiction, definitely stands out in the crowd. This installment of the Restricting Covenant Series looks at the competing views of the Golden State and The First State’s on the enforceability of restrictive covenants, and the critical importance of conducting a “choice of law” analysis to settle this feud.