As England experiences a second lockdown, the UK Government has announced an extension of the Coronavirus Job Retention Scheme (also known as the furlough scheme) to protect businesses and employees as the pandemic continues to adversely impact the economy. Additionally, new regulations have come into force in England which oblige employers to ensure their employees are complying with any requirement to self-isolate.
Pennsylvania and Philadelphia Introduce New Restrictions in Response to Rising COVID-19 Infections
Pennsylvania
On November 17, 2020, Pennsylvania Health Secretary Dr. Rachel Levine issued two new orders in response to rising levels of COVID-19 in the Commonwealth. These orders (1) place certain restrictions on individuals traveling into Pennsylvania, and (2) provide increased and more detailed requirements related to the use of face coverings in the Commonwealth.
The travel order requires that all travelers entering Pennsylvania from other countries and states, whether a returning resident or a visitor, must have a negative COVID-19 test within 72 hours prior to entering the Commonwealth. If the traveler cannot obtain a negative COVID-19 test, he or she must quarantine for 14 days upon his or her arrival in Pennsylvania or until he or she obtains a negative COVID-19 test result, whichever is earlier. The travel order takes effect on November 20, 2020. Importantly, this order does not apply to individuals who are travelling to or from Pennsylvania for work or medical reasons.
Part 27 of the “The Restricting Covenant Series”: Disgorgement
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.
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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.
Continue reading “California Non-Compete and Trade Secret Catch-Up”
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.
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.