For the last several years, non-compete agreements have been under attack in the U.S. by regulators, legislators, and even the courts. For example, in October 2018, Massachusetts joined states like California, North Dakota, Montana, Idaho, Utah, and others by enacting a law regulating non-compete agreements, including providing for “garden leave” and making them inapplicable to “non-exempt” employees. Courts do not favor non-competes and will often look for any reason to limit them or invalidate them completely. But, love them or hate them, non-compete agreements are here to stay, and businesses continue to rely on them as one way to protect customer goodwill along with confidential and proprietary information. See, for example, the recent battle between Google’s Waymo unit and Uber over Anthony Levandowski and the theft of self-driving car technology and know-how. Still, it’s clear that the forces fighting against non-competes are stronger than ever. For example, there is legislation pending in Vermont to ban all non-compete agreements, and at the federal level to ban them for low-wage workers. Which is why it’s important for in-house counsel to take every step possible to ensure the non-compete agreements used by their companies have the best chance of surviving regulatory and judicial scrutiny. This edition of “Ten Things” discusses some tips on how to draft an enforceable non-compete agreement:
Almost all in-house lawyers have dealt with mediation at some point. If you haven’t to date, you will. Mediation is a process to resolve disputes between parties where a neutral third party helps facilitate the discussions, negotiation, and (hopefully) ultimate settlement of the dispute. Unlike arbitration, mediation is generally voluntary and non-binding. Meaning, in addition to picking their mediator, the parties get to decide whether and how they will resolve their dispute. There are times when mediation is mandated, i.e., the parties must go through the process such as, for example, when their contract requires it as part of a dispute escalation process. Likewise, there are times when a court will require mediation with the judge (or magistrate judge) acting as mediator (sometimes called a “settlement conference”). Mediation is often your best opportunity to settle a dispute before undergoing the expensive process of all-out litigation and trial. Unfortunately, many in-house lawyers — or their clients – treat mediation like a poor cousin to arbitration and waste the opportunity. This is usually because of either indifference or the idea that you can “just show up” and mediate. Wrong! There are many things you need to know about mediation in order to have the best chance at a successful outcome. This edition of “Ten Things” discusses the key points in-house counsel need to know about mediation.
Managing your relationship with outside counsel can be challenging. The good ones work hard to make it easy but, even so, there are times when you and your outside lawyers are not on the same page. One of the areas where this is most common is billing. In short, what should you expect to pay for and what should you not expect to see on a bill? Moreover, there is the issue of logistics, i.e., when do you need to get the bills, what information needs to be included, etc. There are many facets of your relationship with outside counsel that you need to think about and constantly manage. One way to do this is through an engagement letter. While this is a good device to manage some aspects of a particular project, the better path is to create and maintain a set of “Outside Counsel Guidelines” — a standing set of rules for how you and your outside counsel will interact on key issues, especially on billing.
Most in-house legal departments have such guidelines ranging from a few pages to over 50 pages or more. Some newer or smaller legal departments may not have any guidelines at all. Regardless of where you find yourself on the continuum of “got them” to “don’t got them,” as we near the end of the year this is the perfect time to either plan on creating guidelines in 2017 or updating the guidelines you already have on the shelf. If you’re in the latter position, it might be time to think about a wholesale review of your guidelines and whether or not you have a set that matches up with how the department operates today or whether you are living with something created 10 to 15 years ago that doesn’t work well in today’s environment. This edition of “Ten Things” will set out some of the basic things you need to consider when preparing or updating your Outside Counsel Guidelines: