Category - "Recreation"

Minnesota Legislature Agrees to Complete Ban on Noncompetes

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On May 11, 2023, the Minnesota Legislature agreed to a new law rendering void and unenforceable all future covenants not to compete, with limited exceptions for agreements entered into in connection with the sale or dissolution of a business. Following a final vote in the House and Senate, the law will be sent by Gov. Tim Walz for his signature. The law is written to take effect July 1, 2023, and to apply to contracts and agreements entered into on or after that date. With enactment, Minnesota will become the fourth state to impose a complete ban on employment-related noncompetes (joining California, Oklahoma and North Dakota).

The law prohibits any noncompete agreement with an employee or independent contractor that restricts the person from working for another business after termination of employment or independent contractor engagement regardless of a person’s income, with only two very limited carveouts for noncompetes agreed upon (1) during the sale of a business where the agreement prohibits the seller from carrying on a similar business within a reasonable geographical area for a reasonable period of time, or (2) in anticipation of the dissolution of a business where the dissolving partnership or entity agrees that all or any number of the partners, members, or shareholders will not carry on a similar business in a reasonable geographical area for a reasonable period of time. Subject to those limited exceptions, the law provides that any “covenant not to compete” contained in a contract is void and unenforceable. Importantly, a “covenant not to compete” does not include nondisclosure, confidentiality, trade secret, or non-solicitation agreements (including specifically those restricting the ability to use client or contact lists or restricting the solicitation of customers). Also, because “covenant not to compete” is defined in terms of prohibiting conduct “after termination of the employment,” the new law will not prohibit agreements that restrict an employee or independent contractor from working for another business while performing services for a business.

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“Greenwashing” Claims Strike Consumer-Facing Companies: How to Avoid the Increasing Threat of Litigation

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Consumers are increasingly conscious of how the products they buy impact the environment.  Due to this heightened focus on environmental issues, consumer-facing companies frequently highlight the environmentally friendly attributes of their goods and services in advertising and on product labels.  Unfortunately, leading companies are facing a wave of “greenwashing” class action lawsuits challenging these environmental claims.  The Federal Trade Commission’s Green Guides provide some direction for companies seeking to avoid problematic environmental claims.  However, the Green Guides are currently nonbinding and they do not preempt state law.  The plaintiffs’ bar has seized upon this ambiguity and many preeminent companies have faced greenwashing class actions alleging claims under state consumer fraud statutes and related common law theories of liability.  The FTC has also filed lawsuits against several companies.  Consumer-facing companies should take immediate action to assess whether they are complying with the Green Guides and to review their exposure to greenwashing claims.

This article provides a high-level overview of the FTC’s Green Guides, analyzes the recent wave of greenwashing class actions and identifies practical strategies that companies can use to mitigate the risk of greenwashing litigation.

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New California Laws for 2023 and Beyond: What Employers Should Know

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In 2022, California Gov. Gavin Newsom signed many laws impacting California employers. Some of the new laws became effective immediately and others, including some that were signed into law just weeks ago, take effect January 1, 2023, or later. These new laws address several topics, including supplemental paid sick leave, pay transparency, leaves of absence and fast-food restaurant employment standards.

As a reminder, the minimum wage in California is increasing to $15.50 per hour on January 1, 2023, for all employers — regardless of the number of workers employed by an employer. Also, many cities and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage.

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California’s new “Pink Tax Law”

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California’s new “Pink Tax Law,” Cal. Civ. Code § 51.14, which prohibits charging a higher price to one gender vs. another for similar services, takes effect on Jan. 1, 2023.  On paper, California’s law resembles a New York law, Gen. Bus. Law § 391-u, that has been on the books for more than two years.  In practice, the breadth of California’s Unfair Competition Law is likely to yield a bevy of cases testing the boundaries of the Pink Tax Law, with consumer products companies and retailers as the unfortunate victims of these tests.

The Pink Tax Law prohibits businesses from “charg[ing] a different price for any two goods that are substantially similar if those goods are priced differently based on the gender of the individuals for whom the goods are marketed and intended.”  The law considers two items to be “substantially similar” if (1) there are no substantial differences in the materials used to produce them, (2) the intended use is similar, (3) the functional design and features are similar, and (4) the brand is the same or both brands are commonly owned.  Defenses that might justify higher prices include the amount of time, effort, and cost involved in manufacturing the two products.  As a practical matter, however, at least in many cases, these will not be defenses that companies will be able to invoke at the motion to dismiss stage.

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