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In a series of partial summary judgment opinions, the Delaware Chancery Court threw out all non-competition and non-solicitation claims against Alphatec Holdings, Inc., a medical device company, and its chairman and Chief Executive Officer Patrick Miles in a lawsuit filed by Miles’s former employer, NuVasive, Inc. The suit claimed that Miles violated the non-compete and non-solicitation provisions of his employment agreement when he left to work for rival Alphatec in October 2017.

Miles had worked at NuVasive since 2001 and entered an employment contract in September 2016 which included post-employment restrictions against working for a competitor or soliciting NuVasive employees or customers. In October 2017, Miles resigned from NuVasive and accepted a position as the chairman of Alphatec the following day. NuVasive filed suit a week later, claiming that Miles’s departure was part of a year-long scheme that included discouraging NuVasive from acquiring the smaller Alphatec. Continue reading ›

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Some of the top publishing companies recently filed a copyright infringement suit against Audible, an Amazon subsidiary, seeking to enjoin to the audiobook company’s rollout of a new feature called “Audible Captions” which shows the text on-screen as a book is narrated. The plaintiffs in the lawsuit are seven members of the Association of American Publishers (AAP), including the “Big Five” of publishing: Penguin Random House, Hachette Book Group, Simon & Schuster, HarperCollins Publishers, and Macmillan Publishers.

Audible announced the new caption feature back in July and set an official rollout date close to the time when students would be returning to classes in the fall.  In advance of filing the lawsuit, many of the plaintiffs sent Audible cease-and-desist letters or released public statements calling the feature “an unauthorized and brazen infringements of the rights of authors and publishers.”

In the simplest terms, Audible Captions displays the text of an audiobook to listeners in real-time while the book is being read to them. Audible generates the text in real-time using Audible’s transcription technology. According to the complaint, “Audible Captions takes Publishers’ proprietary audiobooks, converts the narration into unauthorized text, and distributes the entire text of these ‘new’ digital books to Audible’s customers.” This conversion of audio to text, the plaintiffs allege, constitutes the creation of unauthorized derivative works in violation of the Copyright Act. Continue reading ›

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In what is expected to shake up the entire “gig” industry in California, Governor Gavin Newson recently signed into law a bill that rewrote the rules of employment law as it relates to using independent contractors in California. The new law, known as Assembly Bill (AB) 5, is expected to grant hundreds of thousands of workers new job benefits and pay guarantees across numerous industries including ride-hailing companies, trucking, janitorial services, nail salons, adult entertainment, construction, media, and healthcare.

Assembly Bill 5, which curbs businesses’ use of “independent contractors,” gained final approval in the state Senate and state Assembly, largely along partisan lines. Independent contractors, some of whom work for multibillion-dollar technology companies, are generally not covered by minimum wage, overtime, sick leave, family leave, or workers’ compensation laws. Nor do businesses pay into Social Security or Medicare for the independent contractors they retain. Continue reading ›

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The Illinois Appellate Court found that a marketing company adequately pleaded a claim for breach of fiduciary duty against one of the former founders of the company who left to work for a competitor. James P. Keane Sr. was one of the founders of Advantage Marketing Group Inc. and owned 35% of the company. When he left his company to purchase and operate a competing business, Advantage sued. The trial court dismissed Advantage’s breach of fiduciary duty claim finding that because Keane was not an officer or director at the time of the alleged conduct, Advantage failed to establish that he owed a fiduciary duty to the company.

The appellate court rejected the argument that only officers or directors of a company owe fiduciary duties to the company. The Court explained that the determination of whether a fiduciary relationship exists must be made based on an examination of the realities of the relationship rather than the employee’s title. Accordingly, the Court examined the nature of Keane’s relationship with Advantage to determine if Advantage adequately alleged that Keane owed fiduciary duties to the company. Continue reading ›

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A U.S. District Court judge in Rhode Island recently granted CVS Pharmacy, Inc. a  preliminary injunction to block an executive who ran its Caremark Retail Network from working for Amazon’s online pharmacy PillPack, finding that the move would likely violate the executive’s non-compete agreement.

John Lavin worked as a senior executive for CVS for 27 years, most recently as senior vice president for provider network services at CVS Caremark, a pharmacy benefits manager (PBM). In this role, Lavin negotiated with retail pharmacies on behalf of CVS Caremark. In May 2017, Lavin entered an agreement which contained a covenant not to compete among other restrictive covenants in exchange for restricted stock units worth $157,000, according to the Court’s opinion. Lavin’s non-compete agreement prohibited him from working for a competitor for 18 months after leaving CVS.

A year after entering the agreement, Lavin allegedly began discussions with PillPack about leaving CVS for a position at Pillpack and even interviewed with executives from both PillPack and Amazon. After interviewing, Lavin was ultimately offered the position of director of third-party networks and contracting, reporting directly to PillPack’s CEO. Shortly thereafter, Lavin resigned from CVS and started employment with PillPack. Continue reading ›

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Restrictive covenants such as covenants not to compete and non-solicitation agreements are key provisions of many employment agreements and are meant to protect the company’s proprietary information and long-term relationships. Beginning January 1, 2020, business owners in Oregon using non-compete agreements must take into account the notice requirements imposed by a recently passed law or their non-compete agreements will not be enforceable.

Earlier this year, Oregon Governor Kate Brown signed House Bill (HB) 2992, which imposes a new burden on employers who utilize noncompetition agreements with their Oregon employees. Under the new law, an employer must provide the former employee with a signed, written copy of their non-compete agreement within 30-days following their termination. If an employer does not provide a copy of the non-compete agreement to the former employee within this window, the employer forfeits the right to enforce the non-compete agreement. Continue reading ›

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A purchaser of a classic 1973 Ford Bronco sued the car’s auctioneer in Illinois court. The purchaser alleged that the vendor committed fraud by misrepresenting the condition of the vehicle in its advertisements and during the auction. The circuit court dismissed the case for lack of personal jurisdiction. The Illinois Appellate Court reversed, finding that the vendor had sufficient contacts with Illinois when it solicited the business of the purchaser via advertisements, its website, and its communications over email and the phone.

In January 2018, John Dixon saw an advertisement posted by GAA Classic Cars, LLC on a car-related website. The advertisement listed a 1973 Ford Bronco for sale at auction. Dixon responded to the advertisement by sending an email to GAA requesting more information about the Bronco including how to bid for it. GAA responded with an email to Dixon, inviting Dixon to bid on the Bronco at the auction scheduled for March 2, 2018. GAA’s email told Dixon that he could participate via live simulcast bidding or on the telephone via phone bidding. GAA added that Dixon could find more information about the Bronco at GAA’s website. Dixon asked for pictures of the Bronco’s engine. GAA responded by email that it would send him pictures of the engine once GAA received the Bronco from its owner. GAA told Dixon that the auction price for the Bronco should run around $30,000.00 – $40,000.00. Continue reading ›

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As the call for political activism has grown louder and wider in the past few years, most of us have seen or heard people urging us to call our political representatives to let them know how we feel about certain issues. But what if doing so could land you in court for defamation?

That’s what happened to Maggy Hurchalla, a long-time environmental activist who served as Martin County’s first female commissioner from 1974 to 1994 when she lost to a candidate who was heavily backed by developers.

Hurchalla has spent most of her life fighting to protect the Florida environment from developers. In the 20 years she spent as a county commissioner, growth and development did happen, but as Hurchalla put it, it happened slowly, “sanely”, and in a way that would not have a negative impact on Florida’s environment.

In 2008, Lake Point, a rock-mining company, bought 2,200 acres of what used to be sugar cane fields in Martin County, not far from Lake Okeechobee. Lake Point wanted to mine for limestone and use the leftover pits to store and clean polluted lake water, which would otherwise be flushed down the St. Lucie Estuary and contribute to toxic algae blooms, which are already a problem. The project was approved by both Martin County and the South Florida Water Management District.

That all sounds like a good thing for the environment, but according to Hurchalla, she became troubled when, a few years later, the company offered to sell that water to the city of West Palm Beach. Hurchalla and Martin County officials were not convinced that the plan would really benefit the environment. Continue reading ›

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A condo association held an insurance policy on its condo buildings. In 2014, a hail and wind storm damaged the siding on several of the buildings. The storm, however, damaged only the south and west-facing sides of the buildings. The association’s insurer initially paid the association several million to repair the damage, which covered the replacement cost of siding for the south and west sides of the buildings. The association found, however, that matching siding was no longer produced. The insurer refused to pay the cost of replacing the siding on all sides of the building, so the association sued. The district court ruled in favor of the association, and the insurer appealed. The appellate panel affirmed. The panel found that requiring the insurer to replace all sides of the building was a sensible construction of the contract, given that replacing the siding such that two sides of the building did not match the other two would reduce the value of the properties and keep the insured from being made whole.

Windridge of Naperville Condominium Association held an insurance policy via Philadelphia Indemnity Insurance Company. In May 2014, a hail and wind storm-damaged buildings owned by Windridge. These buildings were insured by Philadelphia Indemnity. The storm directly damaged the siding only on the buildings’ south and west sides. Philadelphia Indemnity paid Windridge $2.1 million for the damage, which covered the replacement of the siding on the south and west sides.

Windridge, however, sought replacement of the siding on all four sides of the building, as matching siding for the south and west sides was no longer available. Philadelphia Indemnity refused to pay those costs, arguing that it was only responsible for replacing the siding that was directly damaged by the storm. The district court granted summary judgment for Windridge, and Philadelphia Indemnity appealed. Continue reading ›

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