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Gibbons Law Alert Blog

Federal Trade Commission Issues Final Rule Banning Non-Compete Agreements, Prompting Immediate Litigation Blocking Enforcement. What Does It Mean For Your Business?

by Christine A. Amalfe, Christopher Walsh and Zachary L. Miller

On April 24, 2024

On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule banning all future and most existing non-compete clauses, with few narrow exceptions for senior executives. The rule, however, was immediately met with legal challenges, casting doubt on its future. The FTC has taken the position that entering into a non-compete agreement is an “unfair method of competition” within the meaning of the Federal Trade Commission Act, therefore rendering non-competes unlawful as a general matter. The FTC reasons that a non-compete ban was necessary to address conduct harming fair competition in the labor market, reducing wages, stifling innovation, and hindering business formation and entrepreneurship. Further, the FTC argues that the current state law approach, which assesses the enforceability of non-competes on a case-by-case basis, has not sufficiently addressed the competition concerns cited by the FTC. On the other hand, opponents of the FTC’s non-compete ban argue that the rule exceeds the commission’s statutory and constitutional authority and that non-competes are crucial in guarding an employer’s trade secrets, intellectual property, and significant investments in employee training and development. Key components of the final rule are: It is an “unfair method of competition” for any worker and an employer to enter into, or attempt to enter into, a non-compete clause, to enforce a non-compete clause,...

NJ Supreme Court Holds That Hospital’s Medical Staff Bylaws Do Not Create Implied Duties of Good Faith

by Christopher Walsh

Posted in General Litigation

On April 24, 2024

Pursuant to New Jersey Department of Health regulations, New Jersey hospitals must implement bylaws to govern the hospital’s medical staff. Those bylaws typically address the qualifications and procedures for being admitted to the hospital’s medical staff and often include a right to a hearing and other procedural protections for a physician who has been denied privileges to the hospital. Though it has long been resolved that a physician may compel a hospital to comply with the procedures set forth in its bylaws, it was less clear whether a hospital’s bylaws created a contract between the hospital and its medical staff, which in turn would give rise to an implied duty of good faith and fair dealing, as well as a right to monetary damages for breach of contract. In Comprehensive Neurosurgical, P.C. v. Valley Hospital, the New Jersey Supreme Court resolved this open issue, holding that a hospital’s bylaws do not amount to a contract and thus do not, without more, give rise to implied duties or monetary damages. The Supreme Court, however, also recognized that an implied contract, which itself would include an implied duty of good faith, can arise from the course of dealings between a hospital and a physician group. In Comprehensive Neurosurgical, a group of neurosurgeons that held longstanding privileges at Valley...

Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd.: Should “Intent” Be Reconsidered in 271(e)(1)?

by Warren K. MacRae

Posted in Customs / ITC / Patent / Pharmaceuticals

On April 9, 2024

Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd., Appeal No. 22-1877 (Fed. Cir. March 25, 2024) Considerations of 271(e)(1), a 2-1 decision on appeal from a grant of summary judgement of non-infringement, addressed the question of whether 35 U.S.C. § 271(e)(1)’s safe harbor applies to the importation of two medical devices (transcatheter heart valve systems) into the U.S. for purposes of exhibiting the devices at a prominent medical conference that reported on the latest developments in cardiovascular medicine.

NYSDEC Proposes Amendments to Cleanup Program Regulations

by David J. Freeman and Matthew J. Sinkman

Posted in Development/Redevelopment

On March 25, 2024

The New York State Department of Environmental Conservation (NYSDEC) has proposed amendments to regulations governing the Brownfield Cleanup Program (BCP), the state Superfund program, and other remedial programs. The proposals would affect many important aspects of NYSDEC’s cleanup programs.

Sweeping Affordable Housing Reform Signed Into Law in New Jersey

by Cameron W. MacLeod and Kenneth D. McPherson III

Posted in Affordable Housing / Environmental and Green Issues / Transactional Real Estate and Leasing

On March 25, 2024

On March 20, 2024, Governor Phil Murphy signed what could be the most significant and impactful affordable housing reform legislation in New Jersey since the original enactment of the Fair Housing Act (FHA) in 1985 in A4/S50 (the “Law”). After the New Jersey Supreme Court declared the Council on Affordable Housing (COAH) “moribund” in 2015, municipalities and developers, as well as interested advocacy groups, have been engaged in constitutional compliance litigation in an attempt to determine how best to create realistic opportunities for the construction of affordable housing. These various cases resulted in a large number of settlements across the state, with some very public and prolonged litigation still pending.

Refusal to Wear a Face Mask May Leave You Constitutionally Unprotected

by Thomas J. Cafferty, Nomi I. Lowy and Lauren James-Weir

Posted in Appellate / General Litigation

On February 29, 2024

Is there a constitutional free speech right to refuse to wear a face mask in public indoor spaces during a recognized public health emergency? The Third Circuit Court of Appeals recently determined there is not, as part of a precedential decision in the consolidated cases of Falcone v. Dickstein, et al. and Murray-Nolan v. Rubin, et al. The Third Circuit addressed the First Amendment issue in the Murray-Nolan case. Specifically, the issue the court confronted was whether, during the COVID-19 pandemic, plaintiff Gwyneth Murray-Nolan, an “advocate for parental choice in masking children at school,” was protected under the First Amendment in her refusal to wear a mask during a Board of Education (“BOE”) meeting, despite the BOE’s mask requirement and the Governor’s Executive Order mandating that New Jersey schools require the use of face masks. (The Falcone case, though likewise arising from an individual’s opposition to a mandatory masking policy, was decided on different grounds.) The plaintiff’s refusal to wear a mask was intended by her as a silent protest against the BOE’s masking policy and its lack of action to unmask children in schools. While the court recognized that the First Amendment protects some conduct in some settings, the court held that the refusal to wear a mask failed to satisfy the constitutional standard...

Governor Murphy Proposes FY 2025 Budget Centered on Opportunity, Affordability, and Shared Responsibility in New Jersey

by Courtney A. Johnson

Posted in State Budget / State Government

On February 28, 2024

Yesterday afternoon, Governor Murphy presented his State FY 2025 Budget to a joint session of the Legislature in Trenton, New Jersey. The proposed budget totals $55.9 billion, keeping total spending growth below 1 percent from the FY 2024 adjusted appropriations ($55.43 billion). It includes a $6 billion surplus. The proposal does not include any new taxes but does include a new 2.5 percent corporate transit fee that will apply to many of the large businesses operating in New Jersey and other smaller revenue raisers (discussed below). The Governor’s budget address was centered around themes of opportunity and affordability. The budget proposal stressed that opportunity is available to all who call New Jersey home and those who may be newcomers to the State. Affordability/Property Tax Relief Governor Murphy addressed rising costs, supply chain snarls, and inflation in his address. The proposed budget aims to improve affordability in the State by addressing property taxes and increasing access to housing. The budget proposal includes $3.5 billion dollars directed toward property tax relief through programs such as the Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) Property Tax Relief Program, which provides property tax rebates to both homeowners and tenants, and the Senior Freeze Program, which provides property tax relief to seniors and differently abled New Jerseyans. The...

NJ Appellate Division Holds That Residency of Party Making First Contact in Long-Term Business Relationship Is Not “Jurisdictionally Dispositive”

by Christopher Walsh

Posted in General Litigation

On February 28, 2024

Personal jurisdiction over an out-of-state defendant cannot be based on the unilateral acts of an in-state plaintiff. Instead, a New Jersey court may assert jurisdiction over a defendant only if that defendant “reached out” to New Jersey in some meaningful way. Consequently, when an out-of-state defendant is sued by an in-state plaintiff alleging a breach of contract, the court will often look to see which party initiated the contractual relationship when deciding whether it has jurisdiction over the defendant. In a recent published opinion, however, the New Jersey Appellate Division clarified that, depending on the particular facts of a matter, jurisdiction may be asserted over an out-of-state defendant even when an in-state plaintiff initiated the relationship. In Allure Pet Products, LLC v. Donnelly Marketing & Development LLC , the plaintiff, a New Jersey-based supplier of pet products, telephoned the defendant, a Utah-based organizer of trade shows, in 2011 to request booth space for a biennial trade show planned for 2012. The agreement was consummated, and the plaintiff exhibited at the 2012 trade show. In 2013, the defendant mailed to the plaintiff a “special offer” to renew its booth space for the 2014 show. The plaintiff accepted the offer and exhibited at the 2014 show. The same pattern held for the 2016 and 2018 shows: The...

Safety First: Counsel Should Take Affirmative Steps to Ensure ESI Is Being Preserved

by Kevin H. Gilmore

Posted in Legal Decisions & Court Rules

On February 26, 2024

In the advent of the 2015 amendment to Rule 37(e), courts have made clear that counsel’s obligation to ensure the preservation of ESI extends beyond the mere issuance of a litigation hold. Instead, to avoid possible sanctions, counsel must take affirmative steps to ensure the client’s compliance with the litigation hold to prevent the destruction of relevant ESI. In multidistrict litigation over a hazardous spill, In re Gold King Mine Release, defendant Harrison Western Construction Corporation (“Harrison”) was sanctioned for its failure to preserve and produce relevant documents related to its work on a Colorado mine prior to the release of millions of gallons of toxic waste. In its 2019 discovery requests, the state of Utah sought documents related to the work Harrison performed or planned to perform at the mine in 2014 and 2015. In response, Harrison was unable to provide most of the requested documents from that time period, claiming – through a third-party IT consultant – that a “catastrophic event” occurred during Harrison’s migration of documents to a new server. Because Harrison could not produce the requested documents, Utah moved for sanctions under Federal Rules of Civil Procedure 37(b) and (e); however, the court seemingly only analyzed Utah’s application under Rule 37(e). In its analysis under Rule 37(e), the court focused on Harrison’s...

Unraveling Environmental Legal Complexities: Lessons from the Clarios Case and RIP Waivers

by Jesse G. Richheimer

Posted in Transactional Real Estate and Leasing

On February 22, 2024

A recent February 5, 2024, decision by the New Jersey Superior Court Appellate Division delivered a significant blow to Clarios, LLC (Clarios), a car battery manufacturer facing environmental scrutiny at its New Brunswick plant. This recent decision has echoed through the environmental legal landscape, leaving companies contemplating the use of Remediation in Progress Waivers (RIP waivers) with critical questions and a renewed sense of caution. The case, far from offering definitive answers, instead highlights the intricate interplay between property rights, environmental stewardship, and the nuances of due process protections. Moreover, the court’s denial of Clarios’s request to postpone remediation has broader implications for scenarios involving joint liability agreements and property transactions, highlighting the complex challenges associated with RIP waivers. By dissecting the court’s reasoning and its implications, we gain valuable insights into the limitations and prudent utilization of RIP waivers, ensuring responsible environmental practices and mitigating unintended legal consequences. Decoding the Chain of Title of the RIP Waiver The complex history of the RIP waiver granted to Clarios in 2007 finds its roots in the ownership transition of the site. Delphi Automotive Systems, LLC (Delphi), the former owner, had been manufacturing automobile batteries at the location. In 2006, Delphi sold the property to Johnson Controls Battery Group, Inc., a corporate predecessor of Clarios, triggering a sequence of...