Legal Updates

Sarbanes-Oxley Whistleblower Complaint Dismissed for Failure to Enumerate Basis of Statutory Protection

An in-house patent attorney who protested that his employer knowingly assigned a $50 million value to acquire patents alleged to be worthless could not link his discharge to whistleblower activity protected by the Sarbanes-Oxley Act. Affirming dismissal in Vodopia v. Koninklijke Philips Electronics, N.V., et al., the Second Circuit Court of Appeals observed that: (1) the complaint clearly centered on the plaintiff’s concern that the patents were invalid, not on the value the company assigned to them; and (2) the complaint did not allege that the $50 million value assigned to those patents was ever reported to the public or to shareholders.

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Recent Developments in the Federal Prescription Drug Pricing Programs

The U.S. Department of Health and Human Services (“HHS”) recently issued several program guidances and announcements related to two federal prescription drug pricing programs: (1) the Section 340B Discount Drug Program (“340B Program”), administered by the Health Resources and Services Administration (“HRSA”); and (2) the Medicaid Drug Rebate Program (“MDRP”), administered by the Centers for Medicare & Medicaid Services (“CMS”). We have set forth below an overview of these recent developments.

I. 340B Program: Two Advance Notices of Proposed Rulemaking: Public Comments Sought

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Update on Noncompete Legislation Pending in the Massachusetts Legislature

Last April, I summarized in detail a pending bill (House No. H4607) which would amend the current law on noncompetes. (See April 13, 2010 Blog Entry).  The bill was considered a compromise bill since there was other legislation filed that sought to make all noncompetes in Massachusetts unenforceable (similar to California).  While that bill has not progressed at all, many observers thought that the “compromise bill” would have support, even though it would have made many current agreements unenforceable and would have made it more difficult for employers to protect proprietary information.

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Immigration Alert: October 2010

October 2010

I.  Large Health Care Organization Pays $257,000 in Civil Penalties to Settle Citizenship Discrimination Claims

II.  U.S. Department of Labor Issues Proposed Rule on H-2B Wage Rates

III.  Fifth Circuit Rules that Hotel Workers on H-2B Visas Are Not Entitled to Recoup Visa Expenses Under FLSA

IV.  Court Strikes New York State Bar to Nonimmigrants Seeking Pharmacist License

V.  October 15, 2010, H-1B Cap Count

VI.  Reminder: 2012 Diversity Visa Lottery Ends on November 3, 2010

VII.  DOS Issues November 2010 Visa Bulletin

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Connecticut Court Enforces Non-Compete Agreement With No Stated Geographic Limitation

In October 2010, in Xplore Technologies Corp. v. Killion, CV10-5013459S, a Connecticut state court examined whether a non-competition clause that had no specified geographic requirement was enforceable. The Court enforced the clause and held that the geographic area was defined by the uniqueness of the product at issue and the limited potential customers for it.

The plaintiff engineers, develops and markets rugged computer tablets intended for work under extreme conditions, such as the military or outdoor work for a company such as AT&T. The plaintiff’s only competitors in the business are Panasonic, Dell and the defendant DRS Technologies, Inc. (“DRS”). A former employee, who was employed by the plaintiff for approximately six years, agreed to join DRS to promote products and services, including the rugged computer, to businesses like AT&T. When the plaintiff sought an injunction to enforce the non-competition clause, DRS argued, among other things, that the clause was unenforceable because it had no geographic limit.

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Update: BC’s Cap and Trade Regulations – Consultation Papers Released


Just a quick update on our blog post last week. Today, the Ministry of Environment released two consultation papers in connection with BC’s proposed cap and trade legislation under the Greenhouse Gas Reduction (Cap and Trade) Act

The consultation paper for Cap and Trade Offsets Regulation can be found here (pdf); and

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Another Illinois Appellate Court Shows Greater Receptivity Toward No-Competes In Illinois

Readers of this blog know that, in October 2009, in Sunbelt Rentals, Inc. v. Ehlers, 333 Ill.Dec. 791, 915 N.E.2d 862 (Ill. App. Ct. 2009), an Illinois appellate court reexamined and rejected over thirty years of well-established precedent regarding the enforceability of restrictive covenants. Specifically, it rejected the “legitimate business interest” test long applied as a threshold issue by Illinois courts when deciding the enforceability of a restrictive covenant (i.e., before an Illinois court will address the reasonableness of a restrictive covenant, the employer must first establish that it is supported by a “legitimate business interest” – a tall order given how that term is defined in Illinois).

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New Chipotle Decision Holds That California Employers Need Only Make Meal And Rest Breaks Available

By Michael Kun

Employers with operations in California continue to await a ruling from the California Supreme Court on the question of whether employers must “ensure” that meal and rest breaks are taken, or merely make them “available.”

The issue has long been before the Court in the similarly-named Brinker and Brinkley cases, and will turn largely on a single question: what does the word “provide” mean.

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Coming Soon: BC’s Cap and Trade Regulations

British Columbians are eagerly awaiting the release of the Ministry of Environment’s consultation papers on the proposed Cap and Trade Emissions Trading Regulation and the Cap and Trade Offsets Regulation, which were set to be posted on the Ministry’s website in September 2010.  Once the consultation papers are posted a 45 day consultation period will follow where the Ministry will be seeking comments from stakeholders, First Nations and the general public on the proposed regulations.

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IRS Delays Payroll Reporting of Health Insurance

On October 14, the IRS announced that the Health Care Reform Law’s requirement that employers report the cost of health insurance on W-2’s along with wages will be delayed by one year.  Now, employers must report health insurance cost on the 2012 W-2s, which in most cases will be issued to employees in January 2013.

The announcement explained that “the Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement.”   The announcement also clarified that health insurance amounts listed on W-2s are not taxable as wages.

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