Non-compete agreements and other restrictive covenants are often a concern when hiring new employees, especially those with specialized skills and abilities. Even in the absence of a restrictive covenant, however, employees and their suitors are still bound by rules that arise solely from the law. Employers must be mindful of these non-contractual restrictions when recruiting potential employees.
You have finally found a prospective employee who meets all of your search criteria and is a superstar (or prospective superstar) in the field. You want to move forward with the hiring process on an expedited basis. You extend a generous offer, which is promptly accepted. And then you discover, one way or another, that this individual has a restrictive covenant agreement with a prior employer. What should you do? What if you don’t find out about the Covenant Agreement until after you have hired the individual?
The issue of whether these class action waivers are enforceable has been a contentious issue. Specifically, federal courts have disagreed whether arbitration agreements containing a class action waiver violate the National Labor Relations Act, thus rendering them invalid and unenforceable. On May 21, 2018, the Supreme Court resolved this issue in Epic Systems Corp. v. Lewis, holding that agreements requiring employees to arbitrate claims on an individual basis are enforceable. Here’s what you need to know.
There are a lot of factors that an employer must stay on top of to make sure his or her business is a success. Some of these are internal to the business (such as trying to produce and sell quality products and services while keeping costs down), while others require focusing on external factors (keeping an eye on trends in the economy and the relevant industry, as well as staying abreast of what the competition is doing). Given all this, it can be all-too-easy to give short shrift to an area of your business that is not only crucial to your success but also a minefield of potential liability and compliance issues – namely, your workforce and your employment practices.
Your business is growing and fortune is shining. Out-of-state opportunities are increasing. Perhaps you are considering expanding operations. If you haven’t already, you’re likely to end up serving the world’s sixth largest economy—California. And who wouldn’t want to be in California? It has nearly 40 million consumers.
Before heading out with your sunscreen and order book, there are a few intricacies of California law that any out-of-state business should keep in mind when doing business with California-based employees and parties.