Monthly Archives: April 2016

ILN Today Post

Restrictive Covenant Keys: Choice of Law, Forum Selection Provisions

Because the law concerning the enforceability of post-employment restrictive covenants varies from state to state, a company’s ability to prevent a former employee from working for a competitor or soliciting the company’s customers or employees often turns on the law governing the agreement. In some states, such as California, non-compete agreements essentially are unenforceable outside the sale-of-business context because of the state’s strong public policy against such agreements. Other states, such as New York, are more willing to enforce post-employment restrictions to the extent they are necessary to protect an employer’s legitimate interests (for example, customer relationships), do not impose undue hardship on the employee, and are not injurious to the public.

Consequently, choice of law is often critical to the enforcement of a restrictive covenant. In 2015, however, New York’s highest court, the Court of Appeals, refused to enforce a choice of law provision in a restrictive covenant agreement because the chosen law offended New York public policy.

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ILN Today Post

The dangers of not accepting a Part 36 offer

The timing and content of a Part 36 offer will often form a crucial step in settlement discussions. A Part 36 offer will, even if not accepted, protect to some extent the offeror’s position on costs.  It will also force the recipient of the offer to focus their mind on settlement.

The recent decision of Edwards-Stuart J in the Technology and Construction Court in Jockey Club Racecourse Ltd v Willmott Dixon Construction Ltd[2016] EWHC 167 (TCC) provides a good illustration of the dangers of failing to accept a Part 36 offer.  More interestingly, the judgment confirmed that it was not necessary for a valid Part 36 offer to reflect an outcome that would be possible at trial. The decision dealt with a number of other issues, but this article will focus on the effect of the decision in relation to the commercial considerations parties face when presented with a well-timed Part 36 offer.

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ILN Today Post

Managing the Very Real Risks of FLSA Class Action Lawsuits

Class action lawsuits by employees and independent contractors asserting claims under the Fair Labor Standards Act (FLSA) continue to plague employers — and show no sign of leveling off, let alone decreasing. Moreover, some strategies that employers have relied upon for protection have become increasingly ineffective, making compliance even more important.

For example, arbitration policies requiring employees to waive their class action rights had been an effective tool in curbing employee class actions. However, the National Labor Relations Board (NLRB) has recently issued rulings that mandatory arbitration policies may violate the National Labor Relations Act (NLRA) — even if they have “opt-out” provisions allowing employees to preserve their class action rights outside of arbitration and to file administrative charges. When striking down mandatory arbitration policies, the NLRB has also ordered employers to notify current and former employees that the mandatory policy had been rescinded or revised and to provide a copy of any revised policy.

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DOL Takes on Misclassification of Employees as Independent Contractors

The U.S. Department of Labor’s Wage and Hour Division (WHD) has significantly stepped up its efforts to reduce the misclassification of workers as independent contractors under the Fair Labor Standards Act (FLSA). In 2015 alone, WHD investigations resulted in more than $74 million in back wages for more than 102,000 workers in a variety of industries.

An employer’s failure to properly classify its workers could result in liability for years of unpaid wages, benefits, and employment taxes, in addition to penalty fees. In addition, a misclassification also could result in employers having to defend costly class action litigation, as well as manage investigations by the WHD (or equivalent state agencies).

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Our Best Offer: Rule 68 and TCPA Class Actions

The Telephone Consumer Protection Act (TCPA) imposes significant restrictions on automatically dialed calls, including prohibitions against virtually all automated calls and text messages to cell phones. The TCPA also offers recoveries of $500 per violation, and $1,500 for a willful violation. It is not surprising, therefore, that plaintiffs have been filing more and more class actions under the TCPA in recent years.

Recent Federal Communications Commission (FCC) rulings that “automatic telephone dialing systems” (ATDS) include devices that merely have the future (as opposed to the current) capacity to dial random or preselected lists of phone numbers, and that human intervention in an ATDS’s calling process will not protect the caller if the device qualifies as an ATDS, likely will encourage even more TCPA litigation.

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Dispute over Ownership of the ‘Killie Pie’

A legal dispute has erupted between Kilmarnock Football Club and a local firm of bakers over ownership rights to the name of a popular football snack – the ‘Killie Pie’, reports the BBC.

The steak and gravy pie is sold at the club’s grounds and was apparently named the best pie in the Scottish Premiere League in 2015. Since 2003 it has been made by Brownings Bakery, and the company has now applied to trademark the name. According to the firm’s managing director, the name of the pie belongs to the bakery and they will be asking the football club to not use it anymore.

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ILN Today Post

Jurisdiction Test for Foreign Defendants Continues to Narrow

In recent years, the century-old standard allowing courts to exercise personal jurisdiction over foreign defendants by showing that they were “doing business” in a forum state has been substantially limited.

Prior to the U.S. Supreme Court’s 2014 ruling in Daimler AG v. Bauman, courts required foreign defendants to maintain “minimum contacts” with a forum state, such that bringing the lawsuit in that state did not “offend traditional notions of fair play and substantial justice.” Accordingly, it had been established law in the Second Circuit, which includes federal courts in New York, that courts had general jurisdiction over a foreign corporation engaged in a “continuous and systematic course of doing business in New York” — by, for example, maintaining an office or employees in New York — regardless of whether the cause of action was related in some way to those activities.

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Healthcare Alert: OIG updates criteria for exclusion from federal health care programs

On April 18, 2016, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) updated its criteria for exercising its permissive exclusion authority against individuals and entities involved in false claims, kickbacks or other fraud and abuse violations.

Section 1128(b)(7) of the Social Security Act (42 USC 1320a-7) allows the OIG to exclude individuals and entities from participating in any federal health care programs (e.g., Medicare, Medicaid, TRICARE, and CHIP) on various grounds relating to fraud and abuse. 

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Attorney Charlotte P. Felber joins the Chicago office of McDonald Hopkins

CHICAGO (April 22, 2016) – Charlotte P. Felber has joined the Business department as an associate at McDonald Hopkins LLC, a business advisory and advocacy law firm.

Based in the firm’s Chicago office, Felber comes to McDonald Hopkins after eight years with Lowis & Gellen LLP.

Felber has considerable experience in the area of corporate transactions and will be part of McDonald Hopkins’ Mergers and Acquisitions Practice, a national team of 25 attorneys who have executed hundreds of acquisitions and divestitures.

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McDonald Hopkins Government Strategies Advisory: This Week in Washington — April 22, 2016

Senate passes watered down FAA reauthorization

This week, by a vote of 95 to 3, the Senate voted to send a watered down Federal Aviation Administration (FAA) reauthorization bill to the House. The bipartisan bill would increase airport security, speed up drone regulations, and require airlines to refund baggage fees when luggage is delayed, among other provisions. The reauthorization, however, does not deal with the potential corporatization of the nation’s Air Traffic Control system, nor does it provide for modernization of the funding tool mechanism for airport infrastructure needs.

A House version of FAA reauthorization, which was approved in committee but has not yet passed the floor, would spin off 14,000 air traffic controllers and 24,000 other FAA employees into a federally chartered, private nonprofit corporation.

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