Lidings becomes strategic legal counsel in Russia to Chinese telecoms manufacturer ZTE Corporation
Monthly Archives: January 2011
In a January 21, 2011 opinion and order, a federal district court in Alabama denied a request for a preliminary injunction from clothing manufacturers Fruit of the Loom, Inc. and Russell Brands, LLC, seeking to prohibit a former employee from continuing to work for a competitor. (Fruit of the Loom, Inc. and Russell Brands, LLC v. Lonnie C. Bishop, Middle District of Alabama 2:2010cv01058). Plaintiffs requested the injunction pending their lawsuit to enforce a Kentucky non-compete agreement against the former employee. Although Kentucky courts generally enforce non-compete agreements where the restraint is no greater than reasonably necessary, this case demonstrates the practical difficulties of enforcement. Even in cases where an employer is successful in an action to enforce a non-compete agreement, the benefit of the agreement can be substantially eroded where a former employee is not immediately prohibited from working for the employer’s competitor.
Proposed Illinois Covenants Not To Compete Act Introduced Again In the Illinois House of Representatives
Co-authored by Christie O. Tate.
As we reported in this blog on March 1, 2010, last year the proposed “Illinois Covenants Not To Compete Act” was introduced in the Illinois House of Representatives. If passed, it would have substantially altered the law regarding non-competition agreements in Illinois. We have been monitoring the progress of the bill, which was re-introduced on January 12, 2011 as House Bill 0016 in exactly the same form as last year. As before, the bill has not attracted significant public attention or commentary, but we will continue to monitor it. For a detailed analysis of the proposed law, please see our original post on March 1, 2010.
On January 27, 2011, U.S. Citizenship and Immigration Services (“USCIS”) announced that it had received a sufficient number of new H-1B petitions to reach the statutory cap for fiscal year 2011 (October 1, 2010, through September 30, 2011), and that January 26, 2011, was the final receipt date for new H-1B petitions requesting an employment start date in fiscal year 2011. USCIS also indicated that the final receipt date would be the date on which it physically received the petition, not the date on which the petition was postmarked. The USCIS notice stated that the agency will reject any cap-subject H-1B petitions that arrive after January 26, 2011.
The Federal Court of Canada has upheld a decision of the Registrar of Trademarks to refuse registration of the mark TEACHERS’ in association with services described as “administration of a pension plan, management and investment of a pension for teachers in Ontario”. The application to register this mark was filed by the Ontario Teachers’ Pension Plan Board.
A December 30, 2010 decision of New York’s Appellate Division, Fourth Department, in James V. Aquavella, M.D., P.C. v. Viola, should be noted by legal practitioners dealing with issues of enforceability of non-competition agreements.
The plaintiffs — an ophthalmologist named James V. Aquavella, M.D. and his professional corporation — sued Ralph S. Viola, M.D., an employee who in 2002 resigned and opened a competing practice within 300 yards of the plaintiffs’ practice. Plaintiffs claimed breach of a non-compete provision that, they argued, barred Viola from competing with plaintiffs for two years.
The 2011 landscape is a product of ground laid before the start of the year. The landmark financial reform legislation and U.S. Department of Labor (“DOL”) initiatives indicate a sampling of new considerations and challenges for employers.
While certain employee-protective legislation was not passed in significant respects, one “sound” from 2010 that is likely to resonate throughout the business community in 2011 relates to bounty awards and protections against retaliation for whistleblowing. The bounty awards introduced in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in July 2010 received substantial, deserved attention. Dodd-Frank brings expanded employee protections against retaliation and the prospect of sharing 10 percent to 30 percent of certain sanctions imposed by the Securities and Exchange Commission (“SEC”) or the Commodity Futures Trading Commission (“CFTC”). For details, see The Sounds of New Whistleblower Awards and Protections under the Dodd-Frank Wall Street Reform and Consumer Protection Act (originally published byBloomberg Finance L.P.).
The National Labor Relations Board Signals Expanded Union Access to Physical Premises and Electronic Communications
In 2011, more is likely to be seen of organized labor, even as the number of employees belonging to unions in the private sector workforce hovers at approximately 7.1 million, or 6.9 percent. The impact of organized labor in the economy, the media, and political discussion may not fully take account of the fact that the percentage of union membership in the private sector during 2010 compares unfavorably to that in the public sector (7.6 million workers comprising 36.2 percent). Moreover, independent contractors (estimated by the Bureau of Labor Statistics in 2005 at 10.3 million, or 7.4 percent of thetotal U.S. workforce) outnumber the private sector unionized workforce.
“Job creation and American competitiveness” are the principles hailed by Congressman John Kline as “vital national priorities,” as he contemplated the 2011 Republican majority in the House of Representatives and his Chairmanship of the re-named House Education and Workforce Committee (known in the last congressional session as the House Education and Labor Committee).
Stating that he favors fostering “an environment of certainty that will give families, businesses, and entrepreneurs the confidence to spend, hire, and invest,” Chairman Kline said that the federal government “cannot legislate and regulate our way to job creation.” Priorities identified for the Education and Workforce Committee in the 112th Congress include:
- Giving employers the certainty, flexibility, and freedom to create jobs;
- Conducting robust oversight of education and workforce programs across the federal government to protect students, families, workers, and retirees;
- Modernizing and streamlining training programs to help job-seekers get back to work; and
- Pursuing education reform that restores local control, empowers parents, lets teachers teach, and protects taxpayers.
Missing from the list of priorities are recent congressional staples, among them:
- Employee Free Choice Act, which would have substantially altered such National Labor Relations Act cornerstones as secret ballot elections conducted in laboratory conditions; election campaigns in which employers could exercise a statutory right to express and disseminate views, arguments and opinions; and collective bargaining where neither a union nor an employer is required to agree to any proposal or make any concession.
- Paycheck Fairness Act, which would have amended the Equal Pay Act by limiting bases of bona fide pay differentials between men and women to those that the employer can defend by demonstrating that they are job-related and consistent with business necessity – adding a remedy of uncapped compensatory and punitive damages.
- Employment Non-Discrimination Act, which would have banned discrimination, and limitations, segregation, or classification of employees and applicants, on the basis of actual or perceived sexual orientation or gender identity.
- Protecting Older Workers Against Discrimination Act, which would have amended the Age Discrimination in Employment Act to overturn the “but for” test, upheld by the U.S. Supreme Court in Gross v. FBL Financial Services, Inc. Under the proposed legislation, plaintiffs would carry their initial burden in age discrimination cases by demonstrating that:
- an impermissible factor was a motivating factor for the practice complained of, even if other factors also motivated the practice, or
- the practice complained of would not have occurred in the absence of an impermissible factor.
- Employee Misclassification Prevention Act, which would have amended the Fair Labor Standards Act to require notice of status and rights as an employee orindependent contractor, together with recordkeeping requirements for non-employees who perform labor or services for remuneration and a special penalty for misclassifying employees as non-employees – reinforced by a rebuttable presumption of employee status if the person making payments to the individual fails to keep records or provide notice.
A shift in congressional realities and priorities makes passage of certain legislation less likely. As a result, the extent to which the executive branch and administrative agencies might advance policy within permissible interpretive and rulemaking bounds could become increasingly important in 2011.