Crisis Law - March 28th Update

1. Antitrust Safe Harbor: I am a plaintiff-side antitrust lawyer. That's what I started my career doing. That was my first love in the law. And that is the basis for all the work I do defending non-compete cases. So I don't say this lightly. We need a temporary antitrust safe harbor for competitors to coordinate their efforts on crisis response. Take food. Take meat specifically. We need companies like JBS, Tysons, Cargil, Smithfield, Perdue and others to be to cooperate and coordinate without fear of antitrust exposure. Their cooperation during this time serves legitimate, pro-consumer goals. Namely, the goal of meeting consumer need. The same goes for any other company dealing with/producing perishable necessities. We should encourage industry cooperation on numerous fronts, including all of the following: Interfacing with government actors and fashioning a unified plan/response; supply chain management; transportation; logistics; and more. Competing companies will not move hard toward collaboration unless and until the federal government (e.g. DOJ/FTC) issue a statement recognizing this new, temporary safe-harbor.
2. Non-Compete Abuse Continues: As expected, non-compete abuse is still rampant. As much as I am strongly for the antitrust safe harbor articulated above, I am strongly in favor of aggressive antitrust enforcement against companies abusing employee non-compete agreements. In the past two weeks, my office has received dozens of phone calls from people who were (a) laid off and (b) reminded of their non-compete obligations. The current crisis has just revealed how corrupt and dysfunctional America's non-compete regime has become, particularly in certain jurisdictions. Now is not the time for those sorts of shenanigans.
3. Companies Ducking Accrued Compensation: This is starting to explode. In the past week, my office has received at least a dozen inquires of this nature: Company A agrees to pay X compensation provided employee/executive meets Y targets. Executive meets Y targets. Compensation is accrued and owing. Company A terminates executive to avoid payment obligations. I'm seeing all sorts of corporate shenanigans and maneuvering to get out of paying substantial bonus or deferred compensation.
4. Fake Emergencies: Lawyers are notorious for filing "emergency" motions when there is no real emergency. Unfortunately, some judges let this slide. But the current COVID19 crisis is already changing things. In the past week alone, I've seen numerous judges throw the book at litigants who sought emergency treatment in obviously non-emergency situation. Let's hope this trend continues even when things start to normalize.
5. Commercial Lease Wars: These are already starting. Who would have thought that brands like The Cheesecake Factory and Mattress Firm would lead the revolution. But these are crazy times. Everybody needs to negotiate, be reasonable, and make deals. Because, otherwise, many landlords will be chasing tenants into bankruptcy court. And in BK court, if they get paid anything at all, it will be substantially discounted.

JP