At the end of June, the U.S. Supreme Court’s decision in Students for Fair Admissions, Inc. v. President & Fellows Of Harvard College, Nos. 20-1199 & 21-707, 2023 WL 4239254 (U.S. June 29, 2023), outlawed race-based affirmative action in higher education. Splitting along ideological lines, the Court’s conservative supermajority ruled, 6-3, the college admissions programs of Harvard and the University of North Carolina violated the Equal Protection Clause of the Fourteenth Amendment. The monumental decision, which dispensed with 45 years of precedent allowing race-conscious admission policies to achieve a diverse student body, has upended the world of higher education.Continue Reading What Does Affirmative Action’s Death Knell Mean for Employers?
Kevin Cloutier
Kevin Cloutier is a partner in the Labor and Employment and Business Trials Practice Groups. Kevin is the Leader of the Firm's Non-Compete and Trade Secrets Teams.
Buyer Beware: Delaware Courts Continue to Refuse to Enforce Deal-Based Non-Competes
In a blog earlier this year, we discussed the Delaware Chancery Court’s refusal to enforce a sale of business non-compete in Kodiak Building Partners, LLC v Adams. We wondered then whether Kodiak represented a one-off decision or whether it augured a trend that might give buyers of businesses pause. Delaware courts seem to have answered the question. In what constitutes a notable trend for buyers of businesses, Delaware courts have twice more refused to enforce non-competes under a sale of a business analysis. Continue Reading Buyer Beware: Delaware Courts Continue to Refuse to Enforce Deal-Based Non-Competes
Illinois Supreme Court Rules All BIPA Claims Are Subject to Five-Year Time Limit
In a victory for the plaintiffs’ bar, the Illinois Supreme Court has ruled that all claims under Illinois’s Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1, et seq., are subject to a five-year statute of limitations. For years, litigants and courts have grappled with whether BIPA claims must be brought within one, two, or five years of an alleged BIPA violation. The Court’s long-awaited decision in Tims v. Black Horse Carriers, Inc., 2023 IL 127801 (Ill. Feb. 2, 2023), puts an end to that pervasive uncertainty. Continue Reading Illinois Supreme Court Rules All BIPA Claims Are Subject to Five-Year Time Limit
Buyer Beware: Delaware Declines to Enforce Sale of Business Non-Compete
Courts and state legislatures continue to take aim at post-employment non-competes. In a companion blog, we recently detailed the Federal Trade Commission’s proposed rule banning post-employment non-competes. However, for years (and even under the FTC’s overreaching proposed rule), non-competes in the sale of business context have generally received less scrutiny.Continue Reading Buyer Beware: Delaware Declines to Enforce Sale of Business Non-Compete
FTC Seeks to Ban Noncompete Agreements in Employment Contracts
On January 5, 2023, the Federal Trade Commission (“FTC”) announced a broad proposed rule that would ban employers from imposing noncompete clauses on their workers. The FTC press release announcing the proposed rule states that noncompete clauses—which apply to about one in five American workers—suppress wages, hamper innovation, block entrepreneurs from starting new businesses and reduce American workers’ earnings between $250 billion and $296 billion per year.[1] The proposed rule would prohibit employers from: (1) entering into or attempting to enter into a noncompete with a worker; (2) maintaining a noncompete with a worker; or (3) representing to a worker, under certain circumstances, that the worker is subject to a noncompete. The term “worker” covers paid staff in addition to independent contractors and unpaid staff. The proposed rule does not apply to noncompete provisions imposed upon 25% owners of a business in transaction documents related to the sale of the business. The proposal is subject to a 60-day public comment period commencing when the Federal Register publishes the proposed rule.Continue Reading FTC Seeks to Ban Noncompete Agreements in Employment Contracts
Could the Supreme Court’s Decision in the Harvard and UNC Cases Indirectly Affect Corporate Diversity Initiatives?
The United States Supreme Court is currently considering two cases concerning whether race-conscious admissions programs are permissible under federal law. While these cases are limited to the relatively narrow universe of university admissions, the Court’s decision may be instructive to private employers and will likely have implications beyond the classroom.Continue Reading Could the Supreme Court’s Decision in the Harvard and UNC Cases Indirectly Affect Corporate Diversity Initiatives?
Buyer Beware: Tenth Circuit Issues Decision Emphasizing Critical Need for Employment Diligence
A recent decision from the Tenth Circuit Court of Appeals highlights some of the pitfalls of entering into commercial transactions without conducting thorough employment diligence – even in the asset purchase context.Continue Reading Buyer Beware: Tenth Circuit Issues Decision Emphasizing Critical Need for Employment Diligence
Colorado’s New Restrictive Covenant Law Now Effective
On August 10, 2022, Colorado House Bill 22-1317 became law. Following the national trend of limiting employer use of non-compete and non-solicit covenants, Colorado now prohibits the use of non-competes and non-solicits except in the sale of business context and with “highly compensated” workers. The law also provides specific notice requirements and imposes costly penalties for non-compliance. The law’s requirements and penalties are not retroactive. The key requirements of the new law are as follows:Continue Reading Colorado’s New Restrictive Covenant Law Now Effective
Buyer (and Seller) Beware: The FTC Is Coming for Your M&A Non-Competes
Since President Biden’s July 2021 direction to the Federal Trade Commission (“FTC”) to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility,” the FTC has ratcheted up its scrutiny of and investigations into non-compete agreements and other restrictive covenants. Now, the FTC has expanded beyond post-employment restrictive covenants to tackle “sale of business” non-competes. Most recently, the FTC voted in favor of a deal-changing proposed order against ARKO Corp. related to its 2021 acquisition of sixty fuel outlets from Corrigan Oil Company.Continue Reading Buyer (and Seller) Beware: The FTC Is Coming for Your M&A Non-Competes
Void vs. Voidable: The Distinction That Can Make or Break a Tortious Interference Claim in Light of the Great Resignation
Over the past two years, employee mobility seems to be at an all-time high. In fact, the labor market is so fluid that pundits and experts often refer to it as the “Great Resignation.” Although employee mobility can be a great opportunity for both employees and prospective employers, employers hiring new employees should always beware of potential problems such as restrictive covenants, which may follow an employee to a new job.
Continue Reading Void vs. Voidable: The Distinction That Can Make or Break a Tortious Interference Claim in Light of the Great Resignation
Seventh Circuit Certifies Hotly-Contested BIPA Accrual Issue to Illinois Supreme Court
In a recent decision regarding an employee’s claims for violations of Illinois’ Biometric Information Privacy Act (“BIPA”), the United States Court of Appeals for the Seventh Circuit asked the Illinois Supreme Court to provide much-needed clarification on the accrual of BIPA violations. See Cothron v. White Castle System, Inc., Case No. 20-3202, 2021 U.S. App. LEXIS 37593 (7th Cir. Dec. 20, 2021).
Continue Reading Seventh Circuit Certifies Hotly-Contested BIPA Accrual Issue to Illinois Supreme Court