At the stroke of midnight last night, the 2019 General Assembly came to a close.

I think it’s fair to say that 2019 will go down in history not for the number of bills impacting employers, but for the breadth of the few that passed.

I’ve recapped the bills in some prior posts, but here’s

Buried deep in the budget (page 417 of 567) that was passed by the state House last night is this provision:

Sec. 305. (NEW) (Effective from passage) For purposes of this section “covenant not to compete” means any contract or agreement that restricts the right of an individual to provide homemaker, companion or home health

If April Showers bring May…Oh never mind. In Connecticut, April might as well mean that the General Assembly is getting serious about the bills under consideration.  All the proposals that make headlines in February mean nothing until committees start to vote on the bills and the bills start getting the spotlight on them.

Usually by

doctorContinuing my review of new employment-related bills is a measure that limits the use of non-compete agreements for doctors.

Anyone who tracks bills knows that the name on the bill sometimes doesn’t match the content. Senate Bill 351 entitled “AN ACT CONCERNING MATTERS AFFECTING PHYSICIANS AND HOSPITALS” is a good case in point.

Seems innocuous

Polo Ralph Lauren's agreement is online
Polo Ralph Lauren’s agreement is online

One of the little facts that’s not widely known is that the SEC typically publishes all sorts of executive employment agreements for publicly-traded companies.  They’re ready and available for download.

Why might the average person do that? Well, for one, these agreements can sometimes contain

senate2003While I normally make my year-end reflections at, well, year end, I can’t help but take this moment to see the big picture: We’re hearing an awful lot about restrictive covenants.

These covenants — often in the shape of non-compete clauses or non-solicitation (of employees or customers) clauses — have become popular because companies are

My colleague Chris Engler reports today on a new Connecticut Appellate Court case that focuses on a often misunderstood concept in employment contracts — the need for “consideration”.  What was it that Dire Straits’ sang about in the 1980s? Getting “Money for Nothing”?

We’ve all been told that you can’t get something for nothing.  That lesson was reiterated in a new case by the Appellate Court due to be officially released next week. 

The Facts

As told by the Court, the facts of the case,  Thoma v. Oxford Performance Materials, Inc., revolve around the employer’s attempts to attract investors. 

One investment company told the employer, Oxford, that it wanted assurances that key personnel would not leave.  Oxford dutifully entered into employment contracts with various employees, including Lynne Thoma.

The details of the contracts are important.  This first employment contract gave Ms. Thoma a higher salary, job security (termination could only be with 60 days’ notice), and a severance package.  In return, Ms. Thoma promised not to leave during the contract period and not to work for a competitor for six months after leaving.  Ms. Thoma signed this contract.

 At this point, both parties had gotten a benefit, and all seemed well.

But then a second investment company informed Oxford of its dissatisfaction because the employment contract was “too strong.”  So Oxford went back to the drawing board and crafted new contracts.

 Ms. Thoma’s second contract was quite different.  It removed all of the monetary elements, including the salary increase.  The new contract also allowed Oxford to fire Ms. Thoma without notice or cause.  Finally, it prohibited Ms. Thoma from working for a competitor.  (The length of this prohibition was unclear.  If you’re a contract jargon junkie, I recommend reading the court’s analysis in full.) 

Nevertheless, Ms. Thoma went ahead and signed this contract as well.

A year later, Oxford fired Ms. Thoma.  She demanded the benefits from the first contract.  Thus commenceth this case.

Is the Second Contract Enforceable?

Ultimately, both the trial court and the appellate court sided with Ms. Thoma, concluding that she didn’t receive any consideration in exchange for the sacrifices she made in the second contract.  In other words, she gave up some perks without getting anything in return.


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