Continuing Coverage of Changing Noncompete Laws

Several states have recently seen changes to their laws concerning the enforcement of employee covenants not to compete (sometimes called "noncompetition agreements" or, more colloquially, "noncompete agreements"). Some of those changes have come from the courts (California, Georgia, Illinois, Texas, and Wisconsin), while others have come from state legislatures (Oregon, Idaho, and Connecticut). In the meantime, other states have been reexamining their own noncompetition laws (Georgia, Illinois, and Massachusetts). We reported on Georgia's status on March 29, 2010 (see http://www.foley.com/publications/pub_detail.aspx?pubid=6963 ).

Legislation in Massachusetts, drafted by Foley Partner Russell Beck at the request of Massachusetts State Representatives Lori Ehrlich and Will Brownsberger, was reported favorably out of a joint committee of the Senate and House of Representatives. This was a significant development and considerably increases the likelihood that the bill will become law by August 31, 2010, the end of this legislative year.

The bill would make sweeping changes to Massachusetts noncompetition law, most significantly, the following:

  • Adding a requirement of advance notice before a noncompete agreement can be required
  • Limiting the use of noncompete agreements to employees earning a minimum income (initially, $75,000)
  • Limiting the term of noncompete agreements to a maximum of one year
  • Requiring attorneys' fees to be paid to the employee in certain circumstances, but providing safe harbors for an employer to avoid that possibility

The bill is a game-changer and provides strong incentives for employers to write reasonable noncompete agreements.

Companies located or doing business in Massachusetts should consider examining their existing restrictive covenants and overall trade secret protection programs to ensure the greatest likelihood that their agreements will be enforced and their trade secrets protected.

Department of Homeland Security Unveils New Initiatives to Enhance E-Verify

On March 17, 2010, the Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) jointly announced three new initiatives designed to enhance E-Verify, the Web-based system operated in partnership by USCIS and the Social Security Administration that allows participating employers to electronically verify the employment eligibility of newly hired employees.

The initiatives include:

  • An agreement between USCIS and the Department of Justice Office of Special Counsel for Unfair Immigration-Related Employment Practices (DOJ-OSC) aimed at streamlining the processing of E-Verify employer misuse and discrimination claims
  • New E-Verify civil rights and civil liberties videos that focus on explaining E-Verify procedures and policies, employee rights, and employer responsibilities under the program
  • A new telephone hotline designed to improve E-Verify customer service

The agreement between USCIS and DOJ-OSC establishes a procedure for referring discrimination and employer misuse cases between the two agencies for better enforcement through increased information sharing. Under the agreement, DOJ-OSC will receive referrals of potential discrimination cases that come to USCIS, while USCIS will receive referrals of potential E-Verify misuse cases that are not within DOJ-OSC's enforcement area. Shared information includes information from E-Verify queries such as citizenship status and employer information. DOJ-OSC will use the information to identify patterns or practices of discrimination and to investigate individual claims of citizenship or immigration status discrimination, national origin discrimination, unfair documentary practices during the employment eligibility verification process, and retaliation. Similar agreements are already in place between DOJ-OSC and the Equal Employment Opportunity Commission as well as between USCIS and U.S. Immigration and Customs Enforcement.

The E-Verify videos were created by the DHS Office of Civil Rights and Civil Liberties and USCIS to help employers understand their responsibilities under E-Verify and to inform employees of their rights when working for employers enrolled in E-Verify. The video for employers, "Understanding E-Verify: Employer Responsibilities and Worker Rights," is available in English. The video for employees, "Know Your Rights: Employee Rights and Responsibilities," is available in English and Spanish. Both are available online at www.dhs.gov/e-verify or www.youtube.com/ushomelandsecurity and can be requested by e-mail at E-verify@dhs.gov .

The E-Verify hotline is a dedicated telephone number created to respond to employee inquiries, issues, and complaints. It will use an interactive voice response system that will allow callers to choose from four options: general E-Verify information; completing the Form I-9; contesting an E-Verify case; and filing a discrimination or employer misuse complaint. The hotline can be reached by dialling 888.897.7781 and is active as of today, April 5, 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.