Labor & Employment

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Beginning February 1, 2026, all California employers must provide to all new hires and each existing employee on an annual basis written notice of employee’s workplace and constitutional rights. Prompted by the recent enforcement actions by United States Immigration and Customs Enforcement personnel in California, the notice specifies that labor laws apply to all workers in the state regardless of immigration status. It also requires employers to request from employees a designated emergency contact and to indicate whether that contact should be notified if the employee is arrested or detained at the workplace, Cal. Labor Code § 1555. Additionally, the notice includes an anti-retaliation clause to protect employees from being retaliated against based on their immigration status.

Continue Reading California Senate Bill 294 – New Mandatory Know Your Rights Notices to Employees

Delaware Courts Continue to Scrutinize Noncompete Agreements

As previously reported (here, here and here), courts in Delaware, the once favored “employer-friendly” jurisdiction, have increasingly scrutinized and refused to enforce noncompete agreements. In recent cases, Delaware courts have continued this trend, this time focusing on forfeiture-upon-competition provisions in equity or profit incentive agreements that also include affirmative restrictive covenants. Two of these cases are Delaware Chancery Court noncompete cases. Following on the heels of the Delaware Supreme Court’s affirmation of the employee choice doctrine, three trial courts have held that forfeiture of equity results in a failure of consideration such that the affirmative restrictive covenants are unenforceable. The practical effect of these cases is to force companies to choose between forfeiture or affirmative restrictions when crafting their equity contracts with employees. We can expect further developments in Delaware noncompete law and its implications for drafting incentive units and noncompete agreements under Delaware law, as two of the three cases are now on appeal. Recent cases are discussed below.

Continue Reading Delaware Courts Limit Noncompete Enforcement in Incentive Plans

As previously reported (here and here), some Delaware courts have recently declined to “blue pencil,” i.e., modify and narrow overbroad restrictive covenants. Instead, they have stricken in their entirety covenants deemed overbroad and declined to enforce them. On December 10, 2024, in Sunder Energy, LLC v. Tyler Jackson, et al., the Delaware Supreme Court affirmed that Delaware courts have the discretion to decline to blue pencil overbroad restrictive covenants, even if the defendant’s conduct would violate a more narrowly circumscribed covenant. 

Continue Reading Delaware Supreme Court Declines to Enforce Noncompete Against Company Founder Who Joined Competitor

In Samuelian v. Life Generations Healthcare, LLC, — Cal. App. 5th —, 2024 WL 3878448 (Cal. App. Aug. 20, 2024), the California Court of Appeal answered two long outstanding questions of California law concerning the enforceability of noncompetition agreements in the context of the sale of a business:

Continue Reading California Court of Appeal Rules That Partial Sale of Business Can Bind Seller-Owner to a Noncompetition Agreement

On April 23, 2024, the Federal Trade Commission (the “FTC”) voted 3-2 to issue its final rule (“Final Rule”) banning employers from imposing noncompete clauses on their workers, approving the final rule in a special Open Commission Meeting. 

Continue Reading FTC Votes to Ban Noncompete Agreements

In Murray v. UBS Securities, LLC, 601 U. S. ____, 2024 WL 478566 (2024), the United States Supreme Court (Sotomayor, J.) held that whistleblowers do not need to prove their employer acted with “retaliatory intent” to be protected under the Sarbanes-Oxley Act. Instead, all whistleblower plaintiffs need to prove is that their protected activity was a “contributing factor” in the employer’s unfavorable personnel action. The decision establishes a lower burden of proof for whistleblowers alleging retaliation and, conversely, reaffirms a greater burden on employers who must demonstrate the absence of retaliation under the heightened “clear and convincing” evidentiary standard in order to prevail.

Continue Reading United States Supreme Court Endorses Low Burden of Proof for Whistleblowers

In Cantor Fitzgerald, L.P. v. Ainslie, No. 162, 2023, 2024 WL 315193 (Del. Jan. 29, 2024), the Delaware Supreme Court held enforceable a “forfeiture for competition” provision in a limited partnership agreement, upholding “the freedom of contract” and enforcing “as a matter of fundamental public policy the voluntary agreements of sophisticated parties.” Given Delaware’s recent shift from its typically non-compete friendly stance, the Delaware Supreme Court’s ruling is beneficial for employers.

Continue Reading Delaware Supreme Court Enforces Forfeiture for Competition Provision in Partnership Agreement

In Segway Inc. v. Hong Cai, 2023 Del. Ch. LEXIS 643 (Del. Ch. Dec. 14, 2023), the Delaware Court of Chancery (Will, V.C.) dismissed a claim for breach of fiduciary duty brought by Segway Inc. (the “Company”) against its former President and Vice President of Finance (the “Officer”). The Company framed its claim as a claim for breach of the duty of oversight, commonly known as a Caremark claim (from the landmark case In re Caremark Int’l Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996)). 

Continue Reading The Delaware Court of Chancery Confirms that Duty of Oversight Claims Against Corporate Officers Are Subject to the Same High Pleading Standards Applicable to Duty of Oversight Claims Against Corporate Directors

California has passed two new items of legislation, Senate Bill 699 and Assembly Bill 1076, which will further regulate and restrict the enforcement of employment non-compete agreements in California, and expand the scope of remedies for those affected by them. These new laws will become effective on January 1, 2024, and now is the time for employers to assess and revise their employment-related agreements and restrictive covenants accordingly. As detailed below, they also require employers to notify employees and certain former employees by February 15, 2024 that certain non-compete provisions are void. The two new laws are detailed below.

Continue Reading California Strengthens Non-Competition Law

On August 1, 2023, the Department of Homeland Security (“DHS”) released a new Form I-9. An I-9 form is used to verify work authorization for new hires and a limited number of existing employees. The previous I-9 was issued in 2019 and expires on October 31, 2023. 

Continue Reading DHS Releases New Form I-9 and Video Verification Procedure: Guidance and Checklists for Busy Employers