|

New England employers have seen a restricting on their ability to use non-compete agreements in recent weeks with the passage of new laws in Maine, New Hampshire, and Rhode Island. In a previous post, we profiled the non-compete legislation passed in Massachusetts. The bills in Maine and New Hampshire are set to be enacted later this year, while the bill in Rhode Island has passed the legislature and awaits signature by the governor.

Maine

The newly passed Act To Promote Keeping Workers in Maine is set to take effect on September 18, 2019. The new law will dramatically affect employers who utilize various common restrictive covenants by: (1) prohibiting employers from entering into no-poach or non-solicitation agreements with other employers; (2) barring employers from entering into non-compete agreements with low-wage employees; (3) limiting an employer’s ability to enforce restrictive covenants; (4) mandating advanced disclosure of the use of non-compete agreements; and (5) delaying the effective date of non-compete agreements; and (6) imposing stiff monetary penalties for violation of the law’s restrictions.

The law prohibits employers from requiring employees earning at or below 400% of the federal poverty level to sign covenants not to compete. The new law also prohibits the use of no-poach agreements, even those ancillary to legitimate business collaboration, and non-solicitation agreements, a common provision in NDAs used by many companies.

The law also limits the ability to enforce non-competes by limiting an employer’s legitimate business to only: (a) trade secrets; (b) confidential information; or (c) goodwill. Any employer who violates the law is subject to a fine, not less than $5,000. Continue reading ›

|

A student loan debtor sued her loan servicer, arguing that the servicer had violated Illinois consumer fraud law by asserting that its customer representatives were experts in repayment options and acted in a borrower’s best interest when they were in fact instructed to steer borrowers into payment options that benefited the servicer more than the borrower. The district court dismissed the suit, finding that federal disclosure law preempted the suit, but the appellate court reversed, holding that penalizing loan servicers for making affirmative misrepresentations did not impose additional disclosure requirements on servicers, and thus was not preempted.

Nicole Nelson financed her education with federal student loans. Great Lakes, Nelson’s loan servicer, manages borrowers’ accounts, processes payments, assists borrowers with alternative repayment plans, and communicates with borrowers about the repayment of their loans. Nelson began repaying her loans in December 2009. In September 2013, she changed jobs and her income dropped. She contacted Great Lakes, and its representative led Nelson to believe that “forbearance” was the best option for her personal financial situation. A few months later, Nelson lost her new job. She contacted Great Lakes again in March 2014. This time, the representative again did not inform her of income-based repayment options, and instead steered her into deferment.

Forbearance is the temporary cessation of payments, allowing an extension of the term of the loan, or temporarily accepting smaller payments than were previously scheduled. Under forbearance, unpaid interest is capitalized, which can substantially increase monthly payments after the forbearance period ends. Federal law requires lenders and loan servicers to offer income-driven repayment plans, which Nelson argues are more appropriate in situations of longer-term financial hardship. Enrolling callers in these plans is, however, time-consuming for customer service representatives. Nelson eventually sued Great Lakes on behalf of a putative class, arguing that Great Lakes breach Illinois consumer protection law when it held itself out as an expert on student loan plans and caused her to rely on their assertions that they would operate on her behalf. The district court dismissed Nelson’s complaint, finding that her claims were preempted by federal law that stated that federal student loans were not subject to state-law disclosure requirements. Nelson then appealed. Continue reading ›

|

The government enforces a separation of church and state, but what about a separation of church and employer?

Joel Dahl, who founded and runs Dahled Up Construction, requires all his workers to attend Christian Bible Study as a condition of continued employment.

Ryan Coleman, a convicted felon, said attending Bible study was not a condition of employment for the first month that he worked as a painter for Dahl. When it became mandatory, he attended for almost six months, afraid his felony conviction would prevent him from getting another job. When he finally said he wouldn’t attend the Bible study anymore, he was fired.

Coleman was disappointed, having just received a pay raise two weeks beforehand. He also loved his job, claiming he was excited to get up and go to work in the morning, and realizing how lucky he was to be one of the few people who could say that.

Coleman, who is half Native American, told Fox News that Christianity just wasn’t for him. Continue reading ›

|

If you recently received money as part of a settlement or award for a lawsuit, have you thought about how that settlement or award will affect your taxes? Depending on the nature of your claim, you’ll probably have to pay taxes on that money, just like you would on any other form of income. Whether you’ve already received your award, or you’re thinking of settling a legal dispute, here’s what you need to know:

The Origin of the Claim

Not all awards come in the form of monetary payment. For example, if you sue your employer for loss of income, for whatever reason, then any award you receive will be taxed as wages. If, on the other hand, you bought a car that turned out to be defective and you sue the manufacturer, you might be able to treat any award you receive as a reduction in the price you paid for the car.

Physical Injuries and Illness vs. Emotional Distress

If you sue your employer for physical injuries sustained while on the job, or if you sue your doctor for medical malpractice, those awards are not subject to taxation. While you can also sue for “emotional distress” caused by the incident, any amount granted for that will be taxed. Continue reading ›

|

Ford started installing a new dual-clutch transmission (referred to as the DPS6 transmission) in its Focus and Fiesta models back in 2010 and as many as 1.5 million of the allegedly defective vehicles remain on the road today. The new transmission allowed the cars to reach 40 mpg, but according to recent allegations, Ford failed to properly test the new transmission before putting it out on the road, where it allegedly failed and put customers in danger.

As if that wasn’t bad enough, Ford allegedly ignored warnings from internal engineers and lawyers before putting the cars on the market, at which point the car company allegedly proceeded to ignore complaints from customers for more than five years.

According to complaints, the new transmission allegedly did everything from losing power on highways for no apparent reason to shoot into intersections without warning. Instead of issuing a recall, Ford allegedly gave its dealers talking points that included telling them the cars were operating normally when that was far from the truth.

The financial result of all this doesn’t look good for Ford. The company has had to spend hundreds of millions of dollars in repair costs, many of which didn’t actually fix the cars. In addition to having to litigate lawsuits from thousands of consumers, Ford has also lost a significant amount of business from many loyal fans who now say they will never buy another Ford. Combine that with word of mouth reports of the dangerous cars it let on the road, plus bad press, and it will be difficult for the company to recover financially from this mess. In fact, the company recently warned its investors that litigation over the new DPS6 transmissions poses a financial threat. According to an internal report by Ford, the total costs related to the new transmission could reach $3 billion by the end of next year. Continue reading ›

|

Worldwide, the impact of global change is being felt. While some people deny that climate change is even happening, the courts are, in fact, seeing the effects in the litigation scene. Suits concerning the issue are trending upwards. Jurisdictional restraints and distance are not stopping litigants from coming forward to file suit. Science, damages, and people being passionate about the cause have increased the number of people wanting to seek retribution, restraint or some form of way to mend harm done by being awarded damages and the cutting of carbon emissions. The biggest offenders? Large corporations. The Human Rights Commission in London is currently investigating the catastrophic effects of Typhoon Yolanda which affected those in the Philippines. The nexus between the polluting corporations with the effects on the environment is what will need to be established and whether the condition was exacerbated as a result of that pollution. The difficulty in being able to produce evidence to present this case and the distance of greater than six thousand miles is no bar.

One possible reason for the increase in lawsuits is the lack of response from governance. People are also more environmentally conscious and know of the impacts of gas emissions
when it comes to health, land and air quality. Successful litigation in this realm has not been as successful as environmentalists would like. However, the pendulum is shifting. Public
awareness and better-equipped machines with techniques to track results also tie in with that. A worldwide consensus is now there when it comes to damage. It is proving that a single
corporation is responsible and to what degree used to be more difficult than it is now. We also know that from a few prior posts on our blog, those actions have started in the USA
also. We discussed this when we looked at a suburban business in Chicago that is under scrutiny for implementation of a system in which the way they sterilized caused emissions of
a cancer-causing substance. The operational facility provided sterilization services to the medical, pharmaceutical and food industries. Ironically, the health damage by its emissions made locals
worse off. Continue reading ›

|

Although many financial planning companies rely on the relationship between the financial planner and the customer, E-Trade’s customers primarily conduct business online – usually without communicating directly with any of the company’s financial planners.

Even so, the company includes a non-solicitation agreement as part of their employment contract with their financial consultants and brokers. According to a recent employment lawsuit, Heather Pospisil, a former financial consultant for E-Trade, allegedly violated that agreement by taking E-Trade clients with her when she moved to Morgan Stanley.

According to the lawsuit, Pospisil allegedly accessed a considerable amount of client information late one night, just a few days before she left to join Morgan Stanley, another financial planning company that competes directly with E-Trade.

Pospisil alleges she was merely accessing the information so she could let clients know she was leaving the company. Not only would those clients be unlikely to care, given the online nature of E-Trade’s business, but U.S. Judge Ronald A. Guzman pointed out that it would have been much faster to send a mass email to all her clients. In addition to being more efficient, it also would have provided evidence to support her claim that all she did was provide notice of her departure.

Judge Guzman also noticed that the number of files she accessed on that night accounted for 75% of all the files she had ever accessed in the more than four-and-a-half years she had been working for E-Trade. Continue reading ›

|

Earlier this year, the U.S. Supreme Court ruled in Lamps Plus, Inc. v. Varela that an ambiguous arbitration agreement does not provide a sufficient basis to conclude that parties agreed to class arbitration. In a 5-4 vote, the Supreme Court reversed the Ninth Circuit’s decision that the arbitration agreement between Lamps Plus and one of its employees permitted pursuing class claims in arbitration despite the fact that the arbitration agreement did not expressly address the issue of class arbitration. This is a follow-up to an earlier post where we discussed the District Court’s ruling in this case.

By way of background, the case stemmed from a dispute regarding whether an employer properly protected the tax information of its nearly 1300 employees. After a fraudulent tax return was filed in the name of one of the employees, the employee filed suit against his employer, Lamps Plus. Lamps Plus responded by seeking to dismiss the lawsuit and compel arbitration, relying on the arbitration provision in the employee’s employment contract. Citing the Supreme Court’s 2010 decision in Stolt-Nielsen, S.A. v. Animal Feeds Int’l Corporation, which bars arbitrating claims on a class basis in the absence of a “contractual basis for concluding” that the parties agreed to class arbitration, Lamps Plus sought to compel the employee to arbitrate on an individual basis. The District Court ruled in favor of Lamps Plus on the request to dismiss the case and compel arbitration but rejected the employer’s request to require the employee to arbitrate his claims on an individual basis. Continue reading ›

|

It has become increasingly common over the past few years for employers to include non-compete agreements in their employment contracts. In most cases, they are required to have geographic and time limits, meaning they can only be enforced in a certain geographical area for a certain period of time (usually six months to a year after termination of employment).

The restrictions on non-compete agreements vary from state to state, with a few states, such as California, refusing to recognize any non-compete agreements, even those signed in states that do recognize such contracts.

In one recent case against a realtor in Connecticut, Century 21 Access America successfully sued a former employee and obtained an injunction against her. Under Connecticut state law, non-compete agreements are recognized and enforceable.

Vassilia Mazzotta’s employment agreement with Century 21 stated that she would not work for a competitor or solicit clients within 15 miles of Century 21’s offices for a period of two years after termination of her employment with Century 21.

Shortly after resigning from her position as a real estate broker with Century 21, Mazzotta went to work for a competing real estate company and continued to provide services and solicit clients within 15 miles of Century 21’s offices. Continue reading ›

|

When two founders of a company sued the company that had come into possession of the founders’ patents and intellectual property rights, the district court dismissed their suit for lack of personal jurisdiction. The appellate court affirmed on appeal, finding that the plaintiffs’ lawyer contrived to create personal jurisdiction by ordering a single item from the defendant company be shipped into the state of Illinois, even though the defendant company did not do business in or specifically target the Illinois market. The appellate panel also noted that the conduct that allegedly created personal jurisdiction had happened after the plaintiffs filed suit and was therefore clearly contrived.

Tai Matlin and James Waring, and other business partners co-founded a company called Gray Matter Holdings, LLC in 1997. Matlin and Waring developed certain products for Gray Matter, including an inflatable beach mat known as the “Snap-2-It” and a radio-controlled hang glider called the “Aggressor.” In 1999, facing failure of the company, Matlin and Waring entered into a Withdrawal Agreement with Gray Matter wherein they sold their partnership shares and forfeited their salaries. The agreement also assigned Matlin and Waring’s intellectual property to Gray Matter but entitled them to royalty payments. In the following years, Matlin and Waring frequently brought Gray Matter to arbitration to enforce royalty payments.

In 2002, Gray Matter filed an assignment of the products’ intellectual property rights with the United States Patent and Trademark Office. Matlin and Waring allege that Gray Matter filed the assignment without their knowledge and that the company forged Waring’s signature on the paperwork. The following year, Gray Matter sold assets to Swimways, including the patent rights to Matlin and Waring’s products. A 2014 arbitration between Gray Matter and Matlin and Waring determined that Gray Matter did not assign the Withdrawal Agreement to Swimways upon the sale of the products and that the plaintiffs were owed no further royalties. In 2016, Spin Master acquired Swimways and intellectual property rights. Continue reading ›

Contact Information
Chicago Office
19 S LaSalle St #702
Chicago, IL 60603
Phone: 630-333-0333
Mailing Address
17W220 22nd St #410
Oakbrook Terrace, IL 60181
Phone: 630-333-0333 Please direct all mail correspondence to our Oakbrook Terrace address office.
Highland Park Office
189 Whistler Rd
Highland Park, IL 60035
Phone: 630-710-4990
We accept the following credit cards
Credit Cards Accepted
We accept payment via Venmo at: @L-A-LAW
Phone: 603-333-0333
Visit our site: chicagobusinesslawfirm.com

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2025, DiTommaso Lubin, PC
JUSTIA Law Firm Blog Design