Law360 Agrees to End Non-Compete Pacts for Most Workers

By John Herzfeld, Bloomberg BNA

Law360, the legal news website subsidiary of LexisNexis, has reached a settlement calling for it to end its practice of requiring most employees to sign non-compete agreements, New York Attorney General Eric T. Schneiderman (D) announced June 15 (In re Portfolio Media Inc., N.Y. Att’y Gen. Labor Bureau, No. 16-106, assurance of discontinuance 6/14/16).

The June 14 settlement — which limits use of the agreements to Law 360’s editor-in-chief, managing editor and graphics chief — resolves a state probe begun last year by the attorney general after his office became aware of the practice. A spokesman for Schneiderman declined to disclose whether the investigation had been prompted by complaints or some other tip.

The agreement also requires Portfolio Media Inc., the parent company of Law360, to notify all current employees and any former employees who left within the last year that the non-compete agreement is no longer in effect. Portfolio Media, based in New York, was acquired by LexisNexis in 2012.

“Unscrupulous non-compete agreements not only threaten workers seeking to change jobs, they also serve as a veiled threat to employers who may be reluctant to hire candidates due to the mere existence of a non-compete agreement,” Schneiderman said in a statement.

“Workers like the reporters at Law360 should be able to change jobs and advance their careers without fear of being sued by their prior employer.”

Bloomberg BNA is among Law360’s competitors in the legal news field.

In the settlement, Portfolio Media neither admitted nor denied the attorney general’s findings and conclusions.

Following a December 2015 subpoena, according to the settlement document, the company reported that it had taken “steps to enforce the non-compete narrowly and in a limited manner designed to protect its competitive interests and that it believed it was protecting confidential and strategically sensitive information.”

In a statement, Law360 said: “Being responsive to employee feedback is a crucial element of our philosophy here in striving to make Law360 a great place to work. We have made a change to our policies by removing non-compete components for all of our editorial staff except specified senior leaders.”

The company said that it had “voluntarily collaborated” with Schneiderman’s office and “reached a mutual agreement regarding the best possible outcome for our people.”

It added: “We’re very appreciative of all our employees’ contributions to our ongoing success and look forward to continuing to focus on what we do best: delivering high-quality news content, at a breaking pace, to the legal community.”

In announcing the settlement, Schneiderman said Law360 had made the policy “mandatory for the vast majority of employees, including some in their first jobs out of college with no journalism experience.” It applied to all editorial employees, according to the settlement document.

Pointing to a 1976 precendent under New York law, Schneiderman said that non-compete agreements are barred “unless an individual has highly unique skills or access to trade secrets.”

Law360 reporters, editors, researchers and entry-level news assistants were given the agreement typically on or before their first day of work and told to sign as a requirement of employment, the attorney general found.

The non-compete wasn’t negotiable or waivable, he said.

Schneiderman pointed to a May report issued by the White House and a March Treasury Department report that found harmful effects to the economy from non-compete agreements, as well as efforts to bar the agreements by state law.