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Staying In Stride

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Staying in Stride – Business Law Highlights for Executives

 

Wright, Constable & Skeen, LLP

Damages for
Commercial Contract Breaches

In CR-RSC Tower I, LLC v. RSC Tower I, LLC, Maryland’s Court of Special Appeals has held that certain defendant landowners were not entitled, as part of an effort to minimize the damages awarded against them at trial of a lawsuit stemming from their breach of a land development contract, to introduce evidence that the real estate market suffered a severe downturn following the breach. 

 

 

Arbitration Clauses in
Employment Agreements

In Falls v. 1CI, Inc., the Court of Special Appeals has held that a company’s former CEO is required to arbitrate his claim that the company violated Maryland’s Wage Payment and Collection Law by failing to pay him a bonus. The CEO’s employment agreement stated that “any dispute, claim, or controversy arising out of or relating to this agreement shall be settled by arbitration” and that arbitration fees would be “divided 50-50” between the parties. 

 

Personal Liability for Violation of Wage
Payment and Collection Law

In Campusano v. Lusitano Construction LLC, the Court of Special Appeals has held that that a “four-factor economic reality test for ‘control’” governs whether a corporate officer can be held personally liable for a company’s failure to pay wages in accordance with Maryland’s Wage Payment and Collection Law. The four factors considered under this test include whether the officer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of wage payment, and (4) maintained employment records. 

 

Non-Competition Covenants in
Government Contracts

In Preferred Systems Solutions, Inc. v. GP Consulting, LLC, Virginia Supreme Court has enforced a covenant not to compete in the context of a federal government contract. The contract at issue was a blanket purchase agreement, or “BPA,” under which each of ten information technology companies agreed to provide system solutions work for the Defense Logistics Agency (“DLA”) in connection with the latter’s business systems modernization program. 

Interplay of Forum-Selection Clauses and First-Filed Rule

In Mitek Systems, Inc. v. U.S. Services Automobile Association, a Delaware federal court has held that a forum-selection clause in a licensing agreement does not prevent a court in a non-selected forum from resolving disputes concerning that agreement. The forum-selection clause at issue stated that a court of competent jurisdiction sitting in Delaware would resolve such disputes. However, when a dispute between the licensor and licensee arose, the latter filed suit in a Texas court. The licensor responded by filing an action in Delaware. 

 

NLRB Scrutiny of At-Will Disclaimers in Employee Handbooks

The National Labor Relations Board (“NLRB”), which has jurisdiction to determine whether employment policies – in both union and non-union workplaces – unlawfully interfere with employees’ rights under the National Labor Relations Act (the “NLRA”) to engage in “concerted activity,” recently issued “advice memoranda” concerning the at-will disclaimers found in most employee handbooks. 

 

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