Category Archives: Employment Agreements

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Learning from this Company’s Mistake: Don’t Mishandle Employment Agreements

An interview with a successful CEO offers business owners a chance to learn from a costly mistake involving employment agreements. This mistake could have doomed her company before it became a billion-dollar business. Specifically, Therese Tucker is the CEO of BlackLine, which provides automated finance and accounting software. She also founded BlackLine and brought it public. … Continue Reading

Geography Increasingly Complicates Resolution of Non-compete Disputes

On January 8, 2018, the U.S. Supreme Court declined to consider an appeal from a former Stryker Corp. sales representative. The appeal arose from a case involving a non-compete agreement between a Louisiana employee and a Michigan employer. The non-compete agreement contained a forum-selection clause stating that any dispute arising out of the agreement must … Continue Reading

Before Accepting a new Position, are you Required to Sign a Non-compete Agreement?

A former employee recently sued MedMar Inc. and its related companies. The suit, Greenswag v MedMar Inc., pending in the Cook County Circuit Court, alleges the defendants made misrepresentations about the employment opportunity to induce him to sign a non-compete restriction. I haven’t reviewed the complaint, but these sorts of claims are often unsuccessful. This is … Continue Reading

When it Comes to Enforcing a Noncompete Agreement is Timing Everything?

A recent noncompete case from Minnesota offers a cautionary tale for employers and cause for celebration for employees. The case, Safety Center, Inc. v. Stier, (11/6/17), involved an employer that ran a treatment center for special-needs sex offenders. The employer sought to enforce its noncompete agreement against a former program director (Stier). The noncompete agreement … Continue Reading

Changes to the Michigan Business Court

Amendments to the Michigan Business Court Statute go into effect today, October 11, 2017. These amendments primarily focus on clarifying the cases that are to be assigned to business courts. Also, the statute was amended to clarify a Business Court’s jurisdiction to hear business disputes involving equitable or declaratory relief. The amendment now clarifies that … Continue Reading

Revising Non-compete Law to Eliminate Unfair Competition

Non-compete agreements are intended to prevent unfair competition. But they often create unfair advantages against employees and start-ups. And these unfair advantages adversely affect individuals and the overall economy. At least that is the take-away from a recent op-ed in the New York Times. Noncompete Restrictions and the Economy Specifically, Prof. Orly Lobel wrote in Companies Compete but … Continue Reading

An Employer’s First and Best Line of Defense to Discrimination Claims

A recent Michigan Court of Appeals decision highlights the important role employment agreements can play in defending against employment discrimination lawsuits. Specifically, in Sams v Common Ground, when William Sams was hired by Common Ground he signed an employment contract. In that contract, Sams agreed that he would not sue the company one year after … Continue Reading

Noncompete Litigation Between Papa John’s and Panera – Lessons For Protecting Competitive Advantages

Earlier this month a federal district court judge entered a temporary restraining order (TRO) against a former Panera executive and his new employer, Papa Johns. The TRO arose out of a lawsuit to enforce the former Panera executive’s non-compete agreement. That agreement restricted him from competing against Panera for one year after his employment ended. … Continue Reading

Buying or Selling a Business? Don’t Forget to Consider Employment and Non-compete Agreements.

The decision to sell a company involves many considerations. One important – but often overlooked – consideration is the value that should be derived from having enforceable employee and non-compete agreements. However, all too often, due diligence fails to critically assess the enforceability or transferability of non-compete restrictions. As discussed below, the value of the … Continue Reading

Four Take-Aways from an Employer’s Misuse of Overly Broad Noncompete Agreements

Using a broad brush to draft noncompete agreements that are applied universally to a company’s workforce is increasingly coming under fire. And this exposes companies to unnecessary litigation risks, as well as legal fees associated with enforcement costs. Employer Abuse of Noncompete Restrictions A recent example of involves Law360 and its settlement with the New … Continue Reading

Noncompetition Agreements – Impediment to Employee Mobility and Innovation?

The Wall Street Journal, by Aruna Viswanatha, recently asked whether Noncompete Agreements Hobble Junior Employees. Spoiler alert — they do. According to the Journal: Noncompete agreements—common in computing and engineering jobs, where proprietary technology can be at stake—are spreading to other industries and stretching further down the corporate ladder. Labor-law experts say some employers appear … Continue Reading

Should Employers Reconsider Using Mandatory Arbitration Provisions in Employment Agreements?

The Wall Street Journal recently ran an editorial titled, “Why the Trial Bar and Its Friends Detest Arbitration” by James R. Copland. Mr. Copland’s editorial highlighted some high-profile lawsuits to conclude that the court system often fails companies. Business owners frequently share the same belief and assume their businesses will fare better in arbitration rather … Continue Reading

CEO’s “Reckless Texting” Wrecks Lawsuit to Enforce Noncompete Agreement

Texting as a reckless activity is well-documented when it comes to driving. It is also noted as an increasing health hazard for “petextrians” (pedestrians who are texting, clever huh?) according to Ben Zimmer of the Wall Street Journal in his article “What Do You Call a Reckless Texter?” But can it be “reckless” for your company’s non-compete agreements? … Continue Reading

Dissecting an Injunction Hearing for Enforcing a Non-compete Agreement

In noncompete lawsuits, whether a preliminary injunction should be issued is a critical battle that in large part determines the direction of the lawsuit. For this reason, a recent decision denying a former employer’s motion for injunctive relief in a non-compete enforcement action provides critical insight for companies and individuals. Court Denies Preliminary Injunction in … Continue Reading

Botched Employment Contract Cost Employer Over $200,000

Companies commonly offer salary advances or financially invest in an employee’s education, training, or certification. But a recent decision by the Michigan Court of Appeals is a good reminder of how missteps in accurately documenting such advances or investments can be costly. In this case, an employer was out over $200,000 after investing in education … Continue Reading

Employer has Injunction Reversed after Losing Battle of What Law Applies in Non-compete Lawsuit

I recently ran across a great article about noncompete agreements, which touch upon two important issues that threaten the success of every non-compete lawsuit: the role choice of law provisions play in noncompete litigation and damages at the preliminary injunction stage of a non-compete lawsuit. As to the article by Paul O. Lopez, Can Noncompete Agreements Be … Continue Reading

Differences in State Law Create Hurdles for Enforcing Non-Compete Restrictions

A Court ruled that a company didn’t show a substantial likelihood that it would succeed in enforcing noncompetition restrictions against four former employees. This failure, however, is an important reminder for companies with multi-state operations or employees who may live in a state where non-compete restrictions are not favored or otherwise enforceable. Turning to the … Continue Reading

Language Counts when it Comes to Enforcing Non-compete Agreements

Companies commonly rely on non-compete restrictions to protect their competitive business interests. But if such post-employment restrictions are not properly drafted, those agreements may not be enforceable if challenged in court. Overview of Non-compete Restrictions Briefly, non-competition restrictions prohibit an employee from going to work for a competitor of a former employer. Such post-employment restrictions … Continue Reading

Does Your Company’s Employment Agreements Limit Employment Claims?

Employers often overlook the opportunity to limit liability against their business when it comes to employment agreements. And one of the most common ways in which a business can limit its liability is through a contractual limitations period. A recent Michigan Court of Appeals highlights this point. Specifically, a shortened limitation period in an employer’s … Continue Reading
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