The Inbox - July 12, 2013
This week in Suits By Suits:
- If you've been reading our "State-by-State Smackdown" series on noncompete agreements, you know that this is a hot legal area right now. From a business perspective, the Wall Street Journal's MarketWatch reports that more and more firms are requiring noncompetes from their employees, which may result in perceived overreach when those clauses are tested in court. Last month, we discussed retailer Best Buy's broad new noncompete clause.
- In an interesting twist, a Texas state appellate court held that an arbitrator could award a one-year extension of the parties' one-year noncompete clause contained in a settlement agreement. Nationsbuilders Ins. Svcs, Inc. v. Houston Int'l Ins. Group, Ltd. et al. (No. 05-12-01103-CV; Tex. 5th App. Dist. July 3, 2013). The appellate court overturned the trial court's refusal to confirm the arbitration award on the ground that the arbitrator had "exceeded his powers" pursuant to the Federal Arbitration Act, 9 U.S.C. § 10(a).
- Chicago, Illinois began an investigation of the $442,000 in severance payments received by outgoing Chicago metropolitan rail agency Metra CEO Alex Clifford, who resigned last month with nearly eight months to run on his contract amidst complaints that Clifford was "abrasive, autocratic, [and] unaware or unwilling to work with politicians who have say-so over Metra funding."
- Following up on a story from across the pond that we covered last week: the British Commons Public Accounts Committee is investigating nearly £25m in severance pay awarded to 150 outgoing BBC executives, many of which are alleged to have exceeded the amounts called for in the former employees' employment agreements. The chairman of the BBC Trust has testified that he knew nothing about such payments; the former director-general claims otherwise ("Aye ye did. I told you.").
- More international news: counsel for the Chinese Football Association (that's soccer to our U.S. audience) says that the league is likely headed to binding arbitration before the international Court of Arbitration for Sport regarding disputed severance pay for former coach Jose Antonio Camacho, who was fired as the coach of China's national soccer team following last month's 5-1 loss to Thailand.
- We admit it: occasionally we follow reality TV news -- but only because of the fascinating legal implications! So, uh, perhaps we were aware of the strange case of Amy's Baking Company -- an Arizona eatery featured on the Fox reality show "Kitchen Nightmares," hosted by famously shouty chef Gordon Ramsey -- and the corresponding public meltdown, which has (of course) gone viral. Late last month, Radar Online secured a copy of ABC's employment contract, which was brought to our attention because of the (almost certainly unenforceable) one-year noncompete clause contained in paragraph #20. Earlier this week, however, the owners of Amy's Baking Company have claimed that they've revised their contract, eliminating the noncompete clause and other objectionable provisions including keeping employee tips. [If you haven't seen the original "Kitchen Nightmares" episode, you can watch it in full on YouTube here.]
- Finally, if you'll forgive us a bit of self-promotion: Law360 (subscription required) had a great interview with our own Jason Knott, and Andrew Torrez was quoted in a piece by Crain's Chicago Business discussing the implications of the Fifield decision that was analyzed here last week.