The Inbox - February 7, 2014
Our legal world was abuzz this week with the news that the law firm of Quinn Emmanuel will inaugurate a "work away week" in which its lawyers will be given $2,000, told to travel to anywhere in the world (so long as they have 24/7 internet access) and work from the beach or travel destination of your choice. We here at Suits by Suits aren't quite so fortunate, but we do have all the inside information about the latest disputes between employers and employees:
- Our friends at the Trade Secrets & Noncompete Blog have a nice piece analyzing the basics of the enforceability of covenants not to compete under New York law as seen through the lens of the recent federal court opinion in Reed Elsevier, Inc. v. TransUnion Holding Company, Inc. (No. 13 Civ. 8739, S.D.N.Y. Jan. 8, 2014).
- Speaking of noncompetes -- here's a unique wrinkle that came to our attention: Texas has a statute (§ 15.50 of the Texas Business and Commerce Code) that, in subsection (a) reflects the general LBI test we've discussed at some length, but in subsection (b) sets forth a list of statutory requirements for such clauses to be enforceable against physicians, including the requirement that the covenant must "provide for a buy out of the covenant by the physician at a reasonable price." Id., § 15.50 (b)(2). It's an idiosyncratic requirement, but -- as one employer recently found out -- it's not just boilerplate; by failing to include such a buyout, an appellate court bounced an otherwise-valid noncompete. LasikPlus of Texas, P.C. v. Mattioli (No. 14-12-01155-CV; 14th. App. Dist. Nov. 21, 2013). Our own Jason Knott discussed this case in depth back in December.
- Relatedly, the Texas-based computer forensics firm has released a white paper entitled "Top 10 Best Practices for Non-Compete Enforcement," intended as a guide for employers and their lawyers in drafting covenants not to compete that are more likely to survive an LBI analysis. The paper doesn't cover what we think is the most important issue -- knowing the specifics of your jurisdiction; see the above entries -- but does reflect some of the concerns we've continued to stress here since this blog's inception. It's worth a read.
- Finally, amidst the controversy over large new raises given by Goldman Sachs and JPMorgan Chase to chief executive officers Lloyd Blankfein and Jamie Dimon (once called "The Most Dangerous Man in America"), several executives have voluntarily turned down multi-million-dollar bonuses awarded to them by their respective boards, including Barclays CEO Antony Jenkins (doing so for the second year in a row), and IBM CEO Virginia Rometty, and in fact, all of IBM's senior management.