Keep Up with Current Employment Law Issues

Since the advent of the #MeToo Movement Era, anecdotal evidence suggests that there has been a spike in complaints of alleged sexual harassment in for profit and non-profit companies throughout the country. It is now more important than ever that companies and other organizations deal with sexual harassment allegations head-on. This means investigating allegations promptly and thoroughly, protecting victims against retaliation, taking proper action when wrongful conduct is found to have occurred, and taking steps to try to prevent future harassment. This article will identify some best practices in this regard.

At the risk of stating the obvious, the #MeToo movement, in raising awareness about the traumatic experiences of sexual assault and harassment victims, has already begun to spur changes to our laws. This is readily apparent in Section 162(q) of the Tax Cuts and Jobs Act which disallows employers from deducting settlement payments and legal costs related to sexual harassment or abuse matters if the parties signed a settlement agreement with a confidentiality provision. It would appear that ensuring the confidentiality of a settlement now comes at a higher price to corporations which in the past would have deducted the settlement amount and the attorney’s fees related to that matter. However, as is often the case under the “law” of unintended consequences, this provision may prove detrimental to some plaintiffs by causing companies to (i) fight lawsuits alleging sexual harassment or sexual abuse rather than settle early if they don’t expect to be able to use the foregoing deductions because any settlement will be confidential; and/or (ii) insist on paying lower amounts to settle confidentially, including in instances where plaintiffs desire confidentiality, because of the unavailability of these deductions.

What Are They?

Restrictive covenants are often found in agreements between franchisors and franchisees. The purpose of such covenants is to prevent franchisees—who are the owners and operators of businesses such as “chain-style” stores and restaurants—from harming franchisors by providing similar goods or services after the franchise agreement expires or is terminated. Restrictive covenants can serve to protect the good will of the franchisor after the franchise is reconveyed. See Jiffy Lube Int’l, Inc. v. Weiss Bros., 834 F. Supp. 683, 691 (D.N.J. 1993). 

A typical restrictive covenant clause in a franchise agreement provides that the franchisee may not own or operate a similar or competing entity in a specified area for a specified period of time after the franchise relationship expires or is terminated. 

When Are They Enforceable?