Federal ruling on "Non-Compete" contract clauses

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genlock
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Federal ruling on "Non-Compete" contract clauses

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In a ruling that is being compared to the case that led to free agency in baseball, a federal judge in California upheld an arbitration panel’s decision to release talk-radio host Michael Savage from a contract with his former syndicator, Talk Radio Network.

Savage’s lawyer, Dan Horowitz, called it a landmark case for talk radio.


Savage’s lawyer, Dan Horowitz, called it a landmark case for talk radio.
The judge who issued the order Thursday, Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California, was appointed by President Obama.

“This should give all of us faith in the legal system,” Savage said, “where there is increasing distrust and cynicism about government in general. In this case, an Obama-appointed judge followed the law without bias.”

Savage said the case cost him $1 million in legal fees “and many lost days and nights.”

“I discovered who decent folks were in my radio life,” he said, “those who would not sign false affidavits despite being threatened and the purely rotten souls who put their signatures to completely false statements in an attempt to stab me in the back, although they lived off my talent and hard work.”

Savage said it is “now time for me to expose these people, and I intend to do so, to prevent them from hurting others.”

Horowitz noted that the arbitration panel and the court completely rejected any claims by TRN against Savage.

He said Savage’s victory establishes the ability of radio talent to break away from an employer like any other employee.

Radio hosts, he explained, have been bound by restrictive clauses in their contracts that treat them like businesses instead of regular employees. The law, therefore, has allowed the networks to enforce non-compete agreements with radio hosts that would be illegal if applied to individual employees.
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Re: Federal ruling on "Non-Compete" contract clauses

Post by Tom Taggart »

Before anyone thinks about walking away from his job despite a non-compete, consider this was an unusual case. Normally such cases turn on state law, and are heard in state courts, not Federal court. This case does not establish any Federal precedent that would overrule state law.

Note the following:

1. There was an arbitration clause in the contract. Most courts defer to the arbitrator's decision unless the opponent can show outright bias, fraud, or complete disregard for the factual circumstances.

2. The monetary amount in dispute was high enough to meet jurisdictional limits for the Federal court, also, although the articles on this story don't indicate this, I would not be surprised if the dispute between TRN and Savage did not also include some sort of management corporation managing Savage. In any event, Federal jurisdiction usually requires the parties to come from two different states.

3. It was in the 9th Circuit, which usually marches to its own drummers.
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Re: Federal ruling on "Non-Compete" contract clauses

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It is a start that will generate more challenges to non-compete contracts around the country.
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Re: Federal ruling on "Non-Compete" contract clauses

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A non-compete in WV can only be enforced if it includes consideration to go along with the obligation. For example, my salary at Bristol was $21,000 per year and the noncompete consideration was $2000 per year, giving me an effective salary of $23,000 per year with a 6 month noncompete. It is really nothing more than a shuffling of numbers. Had I decided to continue in radio after that, it would have had to be outside of Charleston and not at any WV Radio Corporation location.

A good agent would have strongly advised me against this deal (and the lawyers in my family DID advise me against it), but who hires an agent when they are only making 23K per year? Wanting so badly to be in radio, I took it. If I were talented enough to do it again, I'd only be willing to sign a noncompete that provided a full salary for the period of enforcement. Then I wouldn't want to compete.

I'm curious about challenges based on restriction of trade. Can't afford to move and can't work in the market...
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Re: Federal ruling on "Non-Compete" contract clauses

Post by Hoosier Daddy »

$21,000 a year? What year was this?

You could go on Welfare and get a raise. Seriously.

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Re: Federal ruling on "Non-Compete" contract clauses

Post by ashton »

2004.
I have since moved on to teaching K-12 technology, which didn't pay much better, but the benefits were good.
Then a short stint as an adjunct professor, where I made the same amount as K-12, but in 8 hours a week.
In June I'll be working in mineral extraction, where the salary will be a metric shit-ton more than what I'm making now. I've signed a NDA on the process and will be more than willing to sign the non-compete based on the considerations that will be offered.
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