When Governor Jay Inslee signs HB 1450, which is 100% expected, Washington State law governing non-competition agreements will shift significantly pro-employee and pro-independent contractor. Once signed by Governor Inslee, this law will become effective on January 1, 2020.
The very first section of HB 1450 sets the tone: "The legislature finds that workforce mobility is important to economic growth and development [and] that agreements limiting competition or hiring may be contracts of adhesion that may be unreasonable."
HB 1450 defines a non-competition covenant to include "every written or oral covenant, agreement, or contract by which an employee or independent contractor is prohibited or restrained from engaging in a lawful profession, trade, or business of any kind." (Note the inclusion of both written and oral agreements in this very broad definition; see exclusions at the Note below).
Under this upcoming law:
Under this new statute, employee non-competition agreements are void and unenforcible unless:
For Washington based employees and independent contractors, non-competition covenants are void if they require adjudication outside of Washington or deprive the person of the protections under the
This new law includes the following remedy provisions, which are very pro-employee and pro-independent contractor:
Thus, even in cases where the court or arbitrator modifies, or blue pencil's the agreement, the employer is still on the hook for paying statutory remedies.
Once signed, this law will become effective on January 1, 2020; however, it can be retroactively applied to non-competition agreements that were entered into before January 1, 2020, under two circumstances:
Note: The following are excluded from the definition of a non-competition covenant:
A plaintiff must prove the following five elements in a tortious interference with a business expectancy case: (1) the existence of a valid business expectancy; (2) that the defendant had knowledge of that business expectancy; (3) an intentional interference inducing or causing termination of the expectancy; (4) that the defendant interfered for an improper purpose or used improper means; and (5) resultant damage.
Element One: Existence of a Business Expectancy: This first element requires proof of something less than an enforceable contract, though a contract is often involved (i.e. non-competition or non-disclosure agreement). For instance, a prospective contractual or business relationship that would be of economic value such as an prospective customer, vendor or supplier. Here, you only have to show that the future business opportunity is a reasonable expectation and not merely wishful thinking.
Element Two: Knowledge of the Expectancy: The second element requires only for the defendant to have known of facts giving rise to the presence of the business expectancy, and the facts need to show the defendant had awareness of “some kind of business arrangement.”
Element Three: Intentional Interference Inducing or Causing a Breach or Termination of the Expectancy: For the third element, you need to show that the defendant desired to bring it about or that the defendant knew that the interference was certain or substantially certain to occur as a result of the defendant’s action.
Element Four: Interfered with Improper Means: On this forth element, you need to show that the defendant acted with improper motive, improper means, or both.” Improper means,” means the defendant had a duty not to interfere. To establish such a duty, the plaintiff may point to a restrictive covenant in a contract, a statute, regulation, recognized common law, or established standard of trade or profession.
Element Five: Resultant Damage: In all cases, the plaintiff must prove damages with reasonable certainty. This means you must produce evidence sufficient to support the claim that allows a reasonable basis for estimating the without mere speculation or conjecture.
For my lawyer and law student followers, here are a few cases on point:
Pac. Nw. Shooting Park Ass'n, 158 Wn.2d 342, 350, 144 P.3d 276 (2006).
Scymanski v. Dufault, 80 Wn.2d 77, 83, 491 P.2d 1050 (1971).
Newton Ins. Agency & Brokerage, Inc. v. Caledonian Ins. Grp., Inc., 114 Wn. App. 151, 52 P.3d 30 (2002).
Life Designs Ranch. Inc. v. Sommer, 191 Wn. App. 320, 364 P.3d 129 (2015)
Calbom v. Knudtzon, 65 Wn.2d 157, 165, 396 P.2d 148 (1964).
Pleas v. City of Seattle, 112 Wn.2d 794, 804-05, 774 P.2d 1158 (1989).
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Commercial leases are typically very one sided; pro landlord with the landlord dictating the terms and conditions of the lease. Commercial leases often allow the tenant to renew the lease for an additional agreed upon term or terms, provided the tenant follows the notice of intent to renew process and deadlines in the commercial lease.
What happens if the tenant fails to follow the notice of intent to renew process and deadlines in the commercial lease? In most cases, the tenant will be out of luck and lose the lease because the general rule is that an option to renew commercial lease clause is strictly construed and must be exercised in a timely manner. Thus, this could result in eviction, or the landlord requiring the tenant to enter into a new commercial lease. However, there might be another option under the right circumstances if, in my experience, the landlord is attempting to evict the tenant: the tenant may be entitled to an equitable grace period, which (if successful) will save the tenant from its failure to follow the notice of intent to renew process and deadlines and reinstate the commercial lease.
There is a handful of cases on this in Washington State, and Washington State appears to be in the minority on the commercial lease equitable grace period/inequitable forfeiture doctrine. For my lawyer and law student readers, I list the lead cases below.
When presented with a commercial lease equitable grace period/inequitable forfeiture doctrine case, our Courts look to the following factors: (1) whether the failure to give timely notice was purely inadvertent or was the result of intentional, culpable, or grossly negligent conduct; (2) whether an inequitable forfeiture would result if equity does not intervene; (3) whether the tenant's failure to give timely notice resulted in the landlord changing its position in any way, and whether the landlord was prejudiced thereby; (4) whether the lease was for a long term, not a short term; and (5) whether there was undue delay in the tenant giving notice.
Commercial lease equitable grace period/inequitable forfeiture cases are factually dense and highly factually dependent. And, like all lawsuits, there will be a tremendous amount of uncertainty to manage. If you are a landlord considering eviction because your commercial tenant failed to exercise its option to renew the lease on time, or a tenant facing and eviction because you missed the deadlines, I would be happy to talk to you.
Washington State Commercial Lease Equitable Grace Period/Inequitable Forfeiture Cases:
Wharf Rest., Inc. v. Protective Order of Seattle, 24 Wn. App. 601, 605 P.2d 334 (1979)
Heckman Motors v. Gunn, 73 Wn.App. 84, 867 P.2d 683 (1994)
Recreational Equip., Inc. v. World Wrapps NW., Inc., 165 Wn. App. 553 (2011)
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Strict Liability for Operators of Places of Public Accommodation Under the Washington Law Against Discrimination
In a landmark decision (01/31/2019), the Washington State Supreme Court held that employers are strictly liable under the Washington Law Against Discrimination for their employee's discriminatory conduct towards a customer in a place of public accommodation.
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How we let this happen is another story, but we all "do business" with the major consumer credit reporting companies, Equifax, Experian and TransUnion. In this crazy world of identity theft and hacking of companies that hold our confidential consumer financial information, a good and free step to protect against identify theft is to freeze your credit report with all of the major consumer credit scoring companies. I recommend that everyone do this today.
The links are below:
Do this now.
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Judge Weinstein of the District Court for the Eastern District of New York has described the four general types of online contracts. These are: (1) Browsewrap; (2) Clickwrap; (3) Scrollwrap; and (4) Sign-in-wrap agreements. Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 394-402 (E.D.N.Y. 2015). Briefly summarized:
Clickwrap agreements "necessitate an active role by the user of a website. Courts, in general, find them enforceable. Drew, 259 F.R.D. at 462 n.22. "Clickwrap agreements require a user to affirmatively click a box on the website acknowledging awareness of and agreement to the terms of service before he or she is allowed to proceed with further utilization of the website." Id. By requiring a physical manifestation of assent, a user is said to be put on inquiry notice of the terms assented to."
Scrollwrap agreements requires users to physically scroll through an internet agreement and click on a separate "I agree" button in order to assent to the terms and conditions of the host website.
Sign-in-wrap agreements couples assent to the terms of a website with signing up for use of the site's services.
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The following list are some of the rules courts apply when construing statutes in legal disputes, with citations for my law student and legal professional readers.
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mMost business owners and executives are at a real disadvantage when it comes to selecting a law firm. They know many of the large law firm players and have reason to trust the skills and reputations of these big firm lawyers. However, they also know that part and parcel with the big law firm lawyer, is high prices to support the big law firm overhead.
How do you know if you might be over-paying for legal services?
I could add to this list, but you get the point.
Part of what you pay for when you hire a lawyer, is the lawyer's law firm overhead, and to be honest, most lawyers do not need that much overhead to deliver high quality legal work.
Most businesses would be better served by working with experienced attorneys who work at smaller, lower overhead, law firms form some if not all of their legal work.
Yes, like mine.
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Florida Statute Sec. 69.081 - Sunshine in litigation; concealment of public hazards prohibited.
(1) This section may be cited as the “Sunshine in Litigation Act.”
(2) As used in this section, “public hazard” means an instrumentality, including but not limited to any device, instrument, person, procedure, product, or a condition of a device, instrument, person, procedure or product, that has caused and is likely to cause injury.
(3) Except pursuant to this section, no court shall enter an order or judgment which has the purpose or effect of concealing a public hazard or any information concerning a public hazard, nor shall the court enter an order or judgment which has the purpose or effect of concealing any information which may be useful to members of the public in protecting themselves from injury which may result from the public hazard.
(4) Any portion of an agreement or contract which has the purpose or effect of concealing a public hazard, any information concerning a public hazard, or any information which may be useful to members of the public in protecting themselves from injury which may result from the public hazard, is void, contrary to public policy, and may not be enforced.
(5) Trade secrets as defined in s. 688.002 which are not pertinent to public hazards shall be protected pursuant to chapter 688.
(6) Any substantially affected person, including but not limited to representatives of news media, has standing to contest an order, judgment, agreement, or contract that violates this section. A person may contest an order, judgment, agreement, or contract that violates this section by motion in the court that entered the order or judgment, or by bringing a declaratory judgment action pursuant to chapter 86.
(7) Upon motion and good cause shown by a party attempting to prevent disclosure of information or materials which have not previously been disclosed, including but not limited to alleged trade secrets, the court shall examine the disputed information or materials in camera. If the court finds that the information or materials or portions thereof consist of information concerning a public hazard or information which may be useful to members of the public in protecting themselves from injury which may result from a public hazard, the court shall allow disclosure of the information or materials. If allowing disclosure, the court shall allow disclosure of only that portion of the information or materials necessary or useful to the public regarding the public hazard.
(8)(a) Any portion of an agreement or contract which has the purpose or effect of concealing information relating to the settlement or resolution of any claim or action against the state, its agencies, or subdivisions or against any municipality or constitutionally created body or commission is void, contrary to public policy, and may not be enforced. Any person has standing to contest an order, judgment, agreement, or contract that violates this section. A person may contest an order, judgment, agreement, or contract that violates this subsection by motion in the court that entered such order or judgment, or by bringing a declaratory judgment action pursuant to chapter 86.
(b) Any person having custody of any document, record, contract, or agreement relating to any settlement as set forth in this section shall maintain said public records in compliance with chapter 119.
(c) Failure of any custodian to disclose and provide any document, record, contract, or agreement as set forth in this section shall be subject to the sanctions as set forth in chapter 119.
This subsection does not apply to trade secrets protected pursuant to chapter 688, proprietary confidential business information, or other information that is confidential under state or federal law.
(9) A governmental entity, except a municipality or county, that settles a claim in tort which requires the expenditure of public funds in excess of $5,000, shall provide notice, in accordance with the provisions of chapter 50, of such settlement, in the county in which the claim arose, within 60 days of entering into such settlement; provided that no notice