The IRS has issued Notice 2009-27 which provides a thorough interpretation of Section 2001 of the American Recovery and Reinvestment Act of 2009 (“ARRA”) relating to premium assistance for COBRA continuation coverage.
Continue Reading THE IRS PROVIDES GUIDANCE ON THE NEW 65% COBRA SUBSIDY OBLIGATIONS
On March 19, 2009, the DOL released the following model notices in connection with the COBRA subsidy outlined in the American Recovery and Reinvestment Act of 2009 (“ARRA”):
1. General Notice (Full Version). This General Notice is to be sent to all qualified beneficiaries who experienced a qualifying event at any time from September 1, 2008 through December 31, 2009, regardless of the type of qualifying event. This full version includes information on the COBRA subsidy (or premium reduction) as well as information required in a standard COBRA election form.
Continue Reading THE DOL ISSUES ITS MODEL COBRA SUBSIDY NOTICES
Although several federal courts in California have previously considered the issue of preemption in trade secret misappropriation cases, the Sixth Appellate District, in K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. ___ Cal.Rptr. 3d ____ (6th Dist. Mar. 3, 2009), became one of the first (if not the first) California state court to hold that the California Uniform Trade Secrets Act (“CUTSA”) preempts state common law claims based on the same facts as a misappropriation claim. This ruling could have a significant impact on how trade secret misappropriation cases are both pled and litigated in California.
On February 17, 2009 President Obama signed the American Recovery and Reinvestment Act of 2009 (“ARRA” or “Recovery Act”) which contains a number of entitlements and obligations affecting the workplace. In order to comply with their new obligations and understand the benefits available to employees or former employees, employers should familiarize themselves with the ARRA promptly. Below is a summary of some of the various employment-related provisions from the ARRA
1. COBRA Subsidy.
a. What is it?
The ARRA provides for a 65% COBRA premium subsidy for certain “assistance eligible individuals.” An “assistance eligible individual” is a COBRA “qualified beneficiary” who meets all of the following requirements:
a. Is eligible for COBRA continuation coverage at any time during the period between September 1, 2008 and December 31, 2009;
b. Elects COBRA coverage (when first offered or during the additional election period provided for under the ARRA); and
c. Has a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period of September 1, 2008 and December 31, 2009.
Continue Reading THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 AND ITS IMPACT ON THE WORKPLACE
In VL Systems, Inc. v. Unison, Inc., the Court of Appeal struck down a “no hire” provision contained in a consulting agreement as violating section 16600 of California’s Business and Professions Code. Section 16600 provides “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” This past summer, the California Supreme Court in Edwards v. Arthur Andersen used the same reasoning to strike down a “non-competition” provision in an employment agreement.
Raymond Edwards was hired by Arthur Andersen as a tax manager in January 1997. His employment by Andersen was made contingent upon his signing a non-competition agreement which prohibited him from working for or soliciting certain clients for a limited period of time following the termination of his employment. The agreement also prohibited Edwards from soliciting Andersen’s employees who he worked with for an 18 month period following the termination of his employment.
During the next five years, Edwards worked for Andersen and moved into the firm’s private client services group where he serviced the accounts for large income/net worth individuals and entities. However, the U.S. government indicted Andersen in connection with the collapse of Enron in March 2002. Andersen announced in June 2002 that it would cease its accounting practices in the United States. Andersen then sold a portion of its tax practice, including Edwards’ Group, to HSBC. Before hiring of any of Andersen’s employees, HSBC required them to execute a “Termination of Non-Compete Agreement” (“TONC”) in order to gain employment with HSBC. The TONC contained a release of any claims that the employee may have against Andersen and was required to be signed by every employee before the deal with HSBC/Andersen went through. Edwards signed his HSBC employment offer letter but declined to sign the TONC. As a result, Andersen terminated Edwards’ employment and HSBC withdrew its employment offer.
In April 2003, Edwards sued Andersen and others for intentional interference with prospective economic advantage and anti-competitive business practices under the Cartwright Act. After Edwards settled with all parties except Andersen, the Court dismissed all but one of the claims against Andersen and later entered judgment in Andersen’s favor on the remaining intentional interference claim. The trial court found that the non-competition agreement did not violate section 16600 because it was narrowly tailored and did not deprive Edwards of his right to pursue his profession.
Continue Reading Edwards v. Arthur Andersen LLP: The Death of Non-Competition Agreements?
