Changes Coming to Illinois Non-Compete and Non-Solicit Law

Katherine M. Flett

By Katherine M. Flett



Authored by Katherine M. Flett with assistance from Haley E. Gassel, law clerk

noncompeteOn August 13, 2021, Governor JB Pritzker signed SB 672 into law, amending the Illinois Freedom to Work Act, the state’s restrictive covenant statute. Going into effect on January 1, 2022, the new bill will only apply to restrictive covenants entered into on or after January 1, 2022.

Compensation Thresholds

In SB 672, the Illinois legislature reserved non-compete and non-solicit agreements for higher paid employees. The law prohibits employers from imposing non-compete agreements on employees earning less than $75,000 annually or non-solicitation agreements on employees earning less than $45,000 annually. Earnings are defined broadly to include compensation, salary, bonus, commission, or any other form of taxable compensation on the employee’s W-2 plus any elective deferrals. These salary thresholds will increase over time, beginning in 2027.

Other Prohibitions

SB 672 includes a special provision for employees furloughed or laid off “as the result of business circumstances or governmental orders related to the COVID-19 pandemic” or under similar circumstances. A non-competition or non-solicitation agreement may not be entered into under these circumstances unless enforcement of the agreement provides for “compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.”

Non-competition and non-solicitation agreements are illegal for non-managerial or non-administrative employees in construction or employees covered by collective bargaining agreements under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.

Employees’ Rights

If an employee is not advised by the employer in writing to consult with an attorney before entering into a non-competition and non-solicitation agreement, the agreement is invalid. Likewise, if an employee does not receive a copy of a non-competition and non-solicitation agreement before starting employment or with at least 14 days to review the covenant, the agreement is invalid. The employee may sign the agreement before the 14-day period has ended.

An employee that successfully defends against an employer’s enforcement of a non-competition or non-solicitation agreement not to solicit shall recover from the employer all costs and reasonable attorney’s fees, along with any other appropriate relief.

Requirements for a Restrictive Covenant to be Valid

Continue reading »

Potential Changes to the Collateral Source Rule in Missouri

Katherine M. Flett

By Katherine M. Flett



Authored by Katherine M. Flett with assistance from Haley E. Gassel, law clerk

personal injuryThe Missouri House is considering a bill that would modify the determination of when evidence of collateral source payments in civil actions is admissible. Sponsored by Representative Alex Riley, Missouri House Bill 577 (HB 577) seeks to amend the Missouri Collateral Source Rule 9 (Section 490.715, RSMo.) and clarifies that the rule applies only to parties named in the plaintiff’s case. Approved by the House Committee and placed back on the formal perfection calendar in May, the bill is waiting to be placed on the House Formal Calendar for floor debate.

Proposed Changes to the Missouri Collateral Source Rule

HB 577 states that “in any action wherein a plaintiff seeks to recover for personal injury, bodily injury, or death, any party may introduce evidence of the actual cost of the medical care or treatment rendered to a plaintiff, or to the person for whose injury or death plaintiff seeks to recover.” It goes on to explain that “actual cost of the medical care or treatment shall be reasonable, necessary, and a proximate result of the negligence or fault of any party.”

The exception to this rule is Subsection 2. Under the bill, any part or all of a plaintiff’s special damages paid for by the defendant, the insurer, and/or authorized representative, (or any combination of these) are not recoverable from the defendant in the plaintiff’s claims for special damages.

Another change to the rule involves which amounts billed can be submitted as evidence. Evidence of any amount billed for medical care or treatment that has been “discounted, written off, or satisfied by payment of an amount less than the amount billed” may be not be admitted. However, the actual cost of medical care or treatment provided and any contracted discounts, price reductions or write offs may be admitted as “evidence relevant to the potential cost of future treatment.”

Potential Effects of Changes to the Missouri Collateral Source Rule Continue reading »

Missouri Joined the Rest of the Country in Enacting “Wayfair Tax”

Katherine M. Flett

By Katherine M. Flett



taxesMissouri joined the rest of the country in enacting a sales tax on online purchases, commonly known as a “Wayfair tax,” when Governor Parsons signed Senate Bill 153 into law. The governor identified the Wayfair tax as a priority in his 2021 State of the State Address. The Wayfair tax will begin in Missouri on January 1, 2023.

Previously, Missouri businesses who made online sales to Missouri customers were required to charge sales and use tax, while companies without a physical presence in Missouri who made online sales to Missouri customers were not.  The new law allows Missouri to impose a sales tax on online purchases made through vendors such as Etsy, eBay, and Wayfair, that are delivered to the state.

The Wayfair tax is intended to even out the playing field for local businesses to compete with online companies. It is also expected to raise up to $41 million for public schools, $5 million for the Missouri Department of Conservation, and $4.5 million for state parks and soil conservation. Continue reading »

High Burden of Proof Established for COVID-19 Exposure, Medical, and Products Liability Actions

Katherine M. Flett

By Katherine M. Flett



covid19The Missouri House voted to pass Missouri Senate Bill 51, which establishes provisions related to COVID-19 exposure liability actions, COVID-19 medical liability actions, and COVID-19 products liability actions, in the final minutes of the 2021 legislative session.  It was signed by Governor Parsons on July 7, 2021.  The new law will become effective on August 28, 2021, and expire on August 28, 2025.

COVID-19 Exposure Liability

Under Senate Bill 51, no business, service, activity, or accommodation will be liable in any COVID-19 exposure action, unless it is proven by “clear and convincing evidence” that “recklessness or willful misconduct” caused an actual exposure to COVID-19 resulting in personal injury.

  • “Recklessness” is defined as “a conscious, voluntary act or omission in reckless disregard of a legal duty and the consequences to another party.”
  • “Willful misconduct” is defined as “an act or omission that is taken intentionally to achieve a wrongful purpose or in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit.”

While we do not know how broadly the courts will interpret these terms, taking actions to prevent the spread of COVID-19, such as requiring mask-wearing, hand sanitizing, and social distancing, could all be helpful in defending a COVID-19 exposure case.  As for vaccinations, the law clearly states, that businesses are not required to establish a policy that requires or mandates vaccination or proof of vaccination to avoid COVID-19 exposure liability.

The new law allows for the presumption that an individual assumes personal risk when the business clearly posts the following message near its entrance: Continue reading »

Illinois Enacts New Restrictions for Considering Criminal History in Employment Decisions and Equal Pay Requirements

Katherine M. Flett

By Katherine M. Flett



employmentEmployment law changes regarding human rights and equal pay have arrived in Illinois.  On March 23, 2021, Governor J.B. Pritzker signed into law S.B. 1480, which makes significant amendments to both the Illinois Human Rights Act (IHRA) and the Illinois Equal Pay Act (IEPA), effective immediately.

Criminal Conviction Record and Employment

S.B. 1480 amends the IHRA with more limitations on how an employer may use an employee’s or applicant’s criminal conviction record when making employment decisions. It is now a civil rights violation for any employer to use a criminal conviction record as a basis to refuse to hire, terminate, or take any other adverse employment action against the applicant or employee with two exceptions:

  1. There is a “substantial relationship” between one or more of the previous criminal offenses and the employment sought or held; or
  2. By granting or continuing employment, an “unreasonable risk” would exist “to property or to the safety or welfare of specific individuals or the general public.”[1]

To determine whether a substantial relationship exists, an employer should consider whether the employment position “offers an opportunity for the same or a similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position.”[2]

The new law also requires an employer to consider the following relevant factors when making this determination: Continue reading »

Salaries Speak Louder than Words: Equal Pay Day 2021

Katherine M. Flett

By Katherine M. Flett



equal pay dayEqual Pay Day 2021 is March 24, symbolizing how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not static and falls earlier each year with this year falling 19 days earlier than just five years ago. While we celebrate this achievement, we have a long way to go to completely close the pay gap between men and women.

The Equal Pay Act has prohibited sex-based wage discrimination for over 50 years. Under the Act, an employer may justify wage disparities only based on one of four exceptions:

  • Seniority;
  • Merit;
  • Measurement of earnings by quantity or quality of production; or
  • A differential based on “any factor other than sex.”

The last “catch-all” exception was the focus of Rizo v. Yovino.Aileen Rizo, an experienced middle and high school math teacher, was hired as a math consultant by the Fresno County Office of Education (“Fresno”). Continue reading »

The Trucking Industry is on the Road to Clarity for Driver Classification Issues

Katherine M. Flett

By Katherine M. Flett



trucking

The trucking industry has commonly used the owner-operator model for interstate commerce.  Whether individual state labor laws, which typically require labor protections such as minimum wage, sick leave, and unemployment and workers’ compensation benefits, apply to truck drivers generally depends on their status as employees or independent contractors.  California attempted to provide a mandatory test for determining whether a driver is an employee or independent contract in its Assembly-Bill 5 (“AB-5”).

For three decades prior to the enactment of AB-5, California courts relied on a test based on the decision in S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations that considered the following factors when determining whether a worker was an employee or independent contractor: (a) the right to control work; (b) whether the worker is engaged in a distinct occupation or business; (c) the amount of supervision required; (d) the skill required; (e) whether the worker supplies the tools required; (f) the length of time for which services are to be performed; (g) the method of payment; (h) whether the work is part of the regular business of the principal; and (i) whether the parties believe they are creating an employer-employee relationship.[1] In April of 2018, the California Supreme Court replaced the Borello classification test with the “ABC test,” by its decision in Dynamex Operations West v. Superior Court.[2]  The AB-5 test essentially codified the “ABC test” established by Dynamex.

However, on December 31, 2019, the day before AB-5 was set to take effect, the Southern District of California granted a temporary restraining order in California Trucking Association, et al v. Attorney General Xavier Becerra, et al., temporarily enjoining the State of California from enforcing AB-5 as to any motor carrier operating in California. [3] Continue reading »

A Closer Look at Title VII and Sexual Orientation and Gender Identity

Katherine M. Flett

By Katherine M. Flett



Authored by Katherine M. Flett with assistance from Connor P. Lynch

The Supreme Court, in a 6-3 decision, ruled that Title VII of the Civil Right Act, which prohibits employment discrimination on the basis of sex, encompasses sexual orientation and gender identity.

Background

discriminationIn recent years, federal circuit courts have come to conflicting conclusions when addressing whether Title VII of the Civil Rights Act, prohibiting employment discrimination on the basis of sex, encompasses sexual orientation and gender identity.  In an attempt to resolve the inconsistent holdings across federal appellate courts, the Supreme Court agreed  to hear three cases that dealt with this issue: Altitude Express,  Inc. v. Zarda; Bostock v. Clayton County; and R.G. & G.R. Harris Funeral Homes, Inc. v. E.E.O.C. All three cases involved an employer allegedly firing a long-time employee simply for being homosexual or transgender. Continue reading »

Missouri Employers and Medical Marijuana: What You Need to Know – On-Demand Webinar

Katherine M. Flett

By Katherine M. Flett



co-presented by Katherine M. Flett and Ruth Binger

Ruth Binger and Katherine Flett presented a webinar on what Missouri employers need to know about medical marijuana in the workplace.medical marijuana

Missouri Employers and Medical Marijuana – What You Need to Know,” a Facebook Live webinar, was part of the Greater St. Charles County Chamber of Commerce‘s Chamber University.

Topics included: Continue reading »

Keeping Your Business in Business During COVID-19: On-Demand Webinar

Katherine M. Flett

By Katherine M. Flett



co-presented by Katherine M. Flett and Ruth Binger

Ruth Binger and Katherine Flett presented a webinar on keeping your business in business, which included employment and business strategies during the pandemic.open for business

Maintaining a Legally Compliant Work Environment and Navigating the ‘New’ Workplace in the Face of COVID-19,” a Facebook Live webinar, was part of the Greater St. Charles County Chamber of Commerce‘s Chamber University.

Topics included: Continue reading »