News & Analysis as of

Employment Litigation Forfeiture

Bennett Jones LLP

Forfeiture Clause Upheld, Punitive Damages Denied: Favourable Takeaways for Employers

Bennett Jones LLP on

The Ontario Superior Court of Justice’s recent decision in Wigdor v Facebook Canada Ltd, 2025 ONSC 4051 provides helpful clarity for employers on two key issues: the enforceability of restricted stock unit (RSU) forfeiture...more

Buchalter

Late Fees, High Stakes: California Narrows Arbitration Fee Forfeiture Rule

Buchalter on

In its August 11, 2025 decision in Hohenshelt v. Superior Court (S284498), the California Supreme Court clarified the reach of Code of Civil Procedure Section 1281.98, the 30-day arbitration fee payment rule. While...more

Holland & Knight LLP

Department of Labor Weighs in on 401(k) Forfeiture Class Actions

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Since September 2023, plaintiffs have filed numerous class action lawsuits alleging that the use of 401(k) forfeitures to offset future employer contributions violates the Employee Retirement Income Security Act of 1974...more

Stikeman Elliott LLP

Status Update: Ontario Court Upholds RSU Forfeiture Provision, Despite Employment Agreement Violating the ESA

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In the recent Wigdor v Facebook Canada Ltd. and Meta Platforms, Inc., 2025 ONSC 4051 decision (the “Decision”), which has not yet been reported, the Ontario Superior Court of Justice upheld the enforceability of restricted...more

ArentFox Schiff

Massachusetts Supreme Judicial Court Ruling: Noncompetition Agreement Act Does Not Apply to Forfeiture Clauses

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The Massachusetts Supreme Judicial Court (SJC) recently clarified the scope of the Massachusetts Noncompetition Agreement Act (MNAA). In Susan Miele v. Foundation Medicine, Inc., the SJC held the MNAA does not apply where a...more

Carlton Fields

Florida Appeals Court Decisions Week of June 30 - July 3, 2025

Carlton Fields on

U.S. Eleventh Circuit Court of Appeals - Lamonaco v. Experian - arbitration - Labriola v. Miami-Dade - employment, First Amendment - Wood v. Fla DOE - school, transgender, § 1000.071, First Amendment - USA v....more

Conn Kavanaugh

It’s Confirmed: Massachusetts Noncompetition Agreement Act Excludes Non-Solicitation Agreements

Conn Kavanaugh on

On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) issued a significant decision in Miele v. Foundation Medicine, Inc. (SJC-13697) confirming that the Massachusetts Noncompetition Agreement Act (the “MNAA”) does...more

Shook, Hardy & Bacon L.L.P.

Massachusetts High Court Rules for Employer in Nonsolicitation Challenge

Although the Massachusetts Noncompetition Agreement Act expressly excludes nonsolicitation agreements from its definition of “noncompetition agreements,” the Massachusetts Supreme Judicial Court (SJC) recently responded to a...more

Morgan, Brown & Joy, LLP

Massachusetts Supreme Judicial Court Clarifies Scope of Massachusetts Noncompetition Agreement Act

On Friday, June 13, 2025, the Massachusetts Supreme Judicial Court issued its decision in Miele v. Foundation Medicine, Inc., SJC-13967, holding that forfeiture clauses tied to non-solicitation agreements were definitively...more

Holland & Knight LLP

Supreme Judicial Court Clarifies Scope of Massachusetts Noncompetition Agreement Act

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The Massachusetts Supreme Judicial Court (SJC) has ruled that a forfeiture clause triggered by a breach of a non-solicitation agreement is not a "forfeiture for competition agreement" under the Massachusetts Noncompetition...more

Farrell Fritz, P.C.

The Forfeited Equity Trap: Why Your Non-Compete Might Be Worthless

Farrell Fritz, P.C. on

Imagine you’re a private equity firm. You buy a company, and you want to retain and incentivize key employees, so you give them some equity in the form of incentive units.  You also want to prevent them from running off and...more

Proskauer - Employee Benefits & Executive...

Tenth Circuit Affirms Distinction Between Forfeiture and Penalty for Competition

In Lawson v. Spirit AeroSystems, Inc., the U.S. Court of Appeals for the Tenth Circuit upheld the forfeiture of certain stock awards for violating a covenant not to compete. Like the Seventh Circuit in LKQ Corp. v....more

Troutman Pepper Locke

Restrictive Covenants Unenforceable Where Consideration Forfeited

Troutman Pepper Locke on

In North American Fire Ultimate Holdings, LP v. Alan Doorly, the Delaware Court of Chancery held that the restrictive covenants included in an incentive unit grant agreement were unenforceable when the units received by the...more

Morris James LLP

Delaware Supreme Court Clarifies Enforcement of Forfeiture-for-Competition Provisions

Morris James LLP on

LKQ Corp. v. Rutledge, C.A. No. 110, 2024 (Del. Dec. 18, 2024) - In this en banc decision, the Delaware Supreme Court answered a certified question from the United States Court of Appeals for the Seventh Circuit...more

Morris, Manning & Martin, LLP

What is an Improper Use of Forfeiture Case Worth? Intuit Settlement Provides Perspective

On Friday, May 16th, plaintiff’s counsel in the Rodriguez v. Intuit Inc. case filed a motion to support a settlement of $1,995,000.  The motion appears to reflect a good compromise between the parties … and as they say, a...more

Ice Miller

Common Employment Law Mistakes and Oversights You Need to Know About: Read This List to Help Avoid Litigation and Liability!

Ice Miller on

Ignorantia legis neminem excusat. That is, “ignorance of the law is no excuse.” Under this principle, those to whom the law applies are presumed to know the law and will be held accountable for violating it....more

Ogletree, Deakins, Nash, Smoak & Stewart,...

German Federal Labor Court Finds Certain Virtual Stock Option Forfeiture Clauses May Unreasonably Disadvantage Employees

On March 19, 2025, the German Federal Labor Court (Bundesarbeitsgericht or BAG) held in Case No.: 10 AZR 67/24 that certain forfeiture clauses in General Terms and Conditions of Business (Allgemeine Geschäftsbedingungen or...more

Troutman Pepper Locke

Feeling Competitive: The Reasonableness of Forfeiture-for-Competition Provisions

Troutman Pepper Locke on

In 2024, employers rushed to track the twists and turns of the Federal Trade Commission’s (FTC) noncompete ban, which attempted to limit the enforceability of agreements that restrict employees from working for a competitor...more

Epstein Becker & Green

Massachusetts High Court To Weigh In on Forfeiture-for-Solicitation Provisions in Era of Massachusetts Noncompetition Agreement...

Epstein Becker & Green on

On Monday, March 3, 2025, the Massachusetts Supreme Judicial Court (“SJC”) heard argument in Miele v. Foundation Medicine, Inc., regarding whether the Massachusetts Noncompetition Agreement Act, G. L. c. 149, § 24L (the...more

Holland & Knight LLP

Northern District of California Dismisses 401(k) Forfeiture Suit with Prejudice

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In Hutchins v. HP Inc., the U.S. District Court for the Northern District of California dismissed – with prejudice – the plaintiff's claims challenging the use of forfeited employer 401(k) contributions. This is the latest...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

Seventh Circuit Rules Forfeiture-for-Competition Clauses Under Delaware Law Enforceable and Not Subject to Reasonableness Review

In 2021, LKQ Corporation (LKQ) filed suit against Robert Rutledge, its former plant manager, in the U.S. District Court for the Northern District of Illinois. LKQ alleged that Rutledge’s working for a competitor within nine...more

BakerHostetler

Delaware Is an Employee Choice State - It Is Official

BakerHostetler on

The Delaware Supreme Court’s ruling in Cantor Fitzgerald v. Ainslie, which reversed the Court of Chancery’s 2023 finding that forfeiture-for-competition provisions should be evaluated by the same “reasonableness” standard as...more

Seyfarth Shaw LLP

Freedom to Compete, But at a Cost: Delaware Signals Forfeiture Clauses Could Be a Viable Non-Compete Alternative

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The Delaware Supreme Court recently clarified that forfeiture-for-competition clauses under the Employee Choice Doctrine may be enforceable against a broader range of employees, including middle managers, not just...more

Husch Blackwell LLP

Colorado Supreme Court Bans "Use-It Or Lose-It" Vacation Policies

Husch Blackwell LLP on

On Monday, June 14, 2021, the Colorado Supreme Court issued a long-awaited decision prohibiting so-called “use-it or lose-it” vacation policies. In Nieto v. Clark's Market, 19SC553, the Supreme Court overturned both the trial...more

Holland & Hart - Employers' Lawyers

CO Employers Can Forgo Paying Out Unused Vacation Upon Termination

Unused vacation time can represent a substantial liability on the books for many employers. Therefore, the extent to which you can control the payout of unused vacation time upon an employee’s separation from employment is an...more

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