In honor of both our Tampa- and Baltimore-based colleagues (including yours truly), this week's Suits by Suits Inbox is rooting for the Tampa Bay Rays to defeat the Boston Red Sox in the American League Division Series; game 1 starts tonight. Alternatively, if you're not into baseball, perhaps you'd prefer a tasty beverage? Here's a link to 31 days of Disney-themed craft cocktails, one for each day of October. With that in mind -- or perhaps in hand, depending on when you read this -- on with our weekly recap:
That’s a straightforward question, and the Virginia Supreme Court has given a rather straightforward answer: yes.
The question came up in Schuiling v. Harris, which we noted as coming over the transom but bears a little more scrutiny. Initially, let’s set aside some of the curious facts about this case. It’s not too curious that the plaintiff, William Schuiling -- owner of a collection of car dealerships in Virginia -- hired a housekeeper, Samantha Harris. It is a bit unusual, however, that Schuiling had his housekeeper sign an arbitration agreement as part of her employment – and that the agreement only addressed arbitration, and no other conditions of employment, such as how socks were to be folded or dusting the ceiling fans. It’s also odd that whatever happened in the employment relationship between Schuiling and Harris was pretty serious: it led Ms. Harris to file a “10-count complaint against Schuiling alleging multiple torts, statutory violations, and breach of contract,” as the Virginia Supreme Court explained – giving no details of the underlying allegations.
T.S. Eliot famously declared that “April is the cruelest month,” which got us thinking: what exactly is September, then? Typing “September is the” into Google gives us a fairly interesting grab-bag of responses. Wikipedia is, as you might expect, pretty literal (“September is the ninth month of the year.”) Thanks, Wikipedia! ESPN tells us that September is “the best month of the baseball season,” but something called “Investopedia” claims that September is the worst month for investing, and a bunch of other sites seem to agree. September is also apparently “National Preparedness Month” at the NOAA (link not available due to government shutdown); national “Library Card Sign-up Month”; “National Senior Center Month”; and even national Abortion Access Month.
Whew! With all of that taking place, you may have missed some of the stories we covered throughout the month of September, including the following:
Here at the Suits by Suits Global Operations Center, we’re a bit bummed that our beloved Washington Nationals Baseball Club has now exhausted any chance it ever had of making the playoffs, as have the almost-local Baltimore Orioles. All is not lost, however, because now we can turn our undivided focus to our Washington football team – the one with the name that is something of a point of dispute. The football season here will be exciting, even if it is off to a rough start.
Glum as our sporting life may be, it’s a worthwhile distraction from the possibility of a government shutdown, although perhaps not as fun as our other new Washington fad: debating the merits of green eggs and ham.
In any event, news of disputes between employers and executives – and news in related areas – continues to come in over our electronic transom. Here are the highlights:
Those of us who live in or near big cities know the value of a good parking space. Two years ago, New Yorkers paid an average of $540 a month to park in midtown Manhattan. And here in Washington, D.C., a permanent space can go for as much as $100,000.
A good parking spot was also important to Pauline Feist, an assistant attorney general with the Louisiana Department of Justice. Feist, citing a disability (osteoarthritis of the knee), asked the Department for a free space in her building rather than in the garage across the street, but her employer turned down her request. She filed a complaint with the EEOC, and five months later, she was out of a job. Feist sued the Department in federal court, alleging that it had discriminated against her by denying her a parking space and then by retaliating against her for filing the EEOC complaint.
The federal trial judge slammed the door on Feist, granting summary judgment on both of her claims. However, in a ruling last week, the Fifth Circuit reversed the summary judgment ruling on Feist’s discrimination claim, sending the case back to the trial court for a second try. Feist v. State of Louisiana, No. 12-31065 (5th Cir. Sept. 16, 2013).
Last month, we took a look at one aspect of the lawsuit brought by former news anchor Larry Conners, who had been terminated by KMOV-TV 4 in St. Louis, Missouri after posting various political comments to his Facebook page. Specifically, we discussed the implications of the Missouri court’s denial of Conners’s motion for a Temporary Restraining Order (TRO) seeking to invalidate Conners’s non-compete clause in order to permit him to seek another TV job in St. Louis. To refresh your memory: we concluded that the court’s refusal to grant a TRO did not necessarily indicate that the clause would ultimately be held enforceable – given the heavy burden a litigant must meet in order to get a TRO – but several aspects of Missouri law seemed to weigh in favor of the clause’s enforceability. (Our full reasoning is set forth here.) We also told you that Conners would be headed back to court to argue his case on the merits.
A recent decision by a federal court in Alexandria, Virginia, illustrates an important point about the trade secrets laws that is often missed: you can be liable even if you merely took your former company’s trade secrets (such as by downloading them onto your thumb drive) but did not use them or disclose them to anyone else. That’s what a company executive in the Alexandria case allegedly did, and the court allowed her former employer’s claim that she violated the Virginia Uniform Trade Secrets Act (the VUTSA) (which parallels many states’ trade secrets laws) to go forward.
Last week, the Virginia Supreme Court reversed a trial court’s ruling that a non-compete agreement was unenforceable on its face as a matter of law. The VSC held that the trial court should not have decided the enforceability of the agreement on a demurrer (more about what that means below) because, in Virginia, whether a non-compete is enforceable (or valid) turns on whether it is “reasonable under the particular circumstances of the case” – that is, whether it is “narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against public policy.” According to the VSC, this means that the particular circumstances of the case matter, and that the enforceability of a non-compete should not be decided “in a factual vacuum.”
We saw this over the weekend and thought you might like to know: more on last week’s revelation that Massachusetts Gov. Deval Patrick (D) favors the “California policy” of making employee covenants not to compete generally unenforceable under state law.
As we told you last week, the linchpin of the administration’s argument is that while noncompete clauses may be perceived as generally pro-business, in the technology sector – a huge market in California, obviously, but also a significant industry in Massachusetts – many believe that the enforcement of noncompetes may hinder employee mobility necessary for such startups to thrive. In this particular area, then, what's good for employees may also be good for employers.
This weekend, Gov. Patrick got an assist from a rather unlikely source – The Wall Street Journal. Greg Gretch, managing director of Sigma West, a venture capital firm targeting technology startups, argues that noncompete agreements are “innovation-killing” and credits California’s decision not to enforce noncompetes for turning San Francisco into a “hot-bed of new startup activity.” Mr. Gretch’s piece can be read in full here; it's worth checking out.
As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.
Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.
John J. Connolly
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