A non-resident seller of a single item in an eBay auction can't be sued for breach of contract in the buyer's home state, according to a case decided this week by the Ninth Circuit Court of Appeals. In Boschetto v. Hansing, plaintiff, a resident of California, purchased a vintage Ford Galaxie from defendant, a resident of Wisconsin, through the eBay internet auction site. Plaintiff arranged for the car to be shipped to California, and found on inspection that it didn't fit the advertised description. He sued in California for breach of contract and fraud.
Defendant moved to dismiss for lack of personal jurisdiction in California. The district court held, and the Ninth Circuit agreed, that a single sale through eBay does not establish the "minimum contacts" with California necessary for personal jurisdiction there. The fact that eBay, as a conduit for the sale, could be viewed by anyone in the state does not alter the analysis.
The court acknowledged that the result might be different if defendant seller had used eBay as its primary marketing method and made regular sales there.
The Oregon Court of Appeals held yesterday in Snider v. Production Chemical Manufacturing, Inc., that an order denying a petition to compel arbitration must be appealed within 30 days of the order. In that case, the party seeking to arbitrate proceeded to a jury trial and appealed the arbitration issue after judgment was entered. Judge Robert Wollheim, writing for the court, held that the appeal was untimely and the Court of Appeals lacked jurisdiction. This result is mandated by the Uniform Arbitration Act, which Oregon adopted in 2003.
Last week, in Edwards v. Arthur Andersen, a unanimous California Supreme Court held that the state legislature has restricted the ability of employers to prevent employees from working for a competitor. As a result of the ruling, noncompetition agreements that do not fit into one of the California's statutory exemptions are void.
Edwards rejects a recent 9th Circuit finding that California's Business and Professions Code section 16600 contained a "narrow restraint" exception allowing companies to use noncompete agreements so long as the pacts restrict only "a small or limited part" of their employees' future ability to work. In rejecting the "narrow restraint" exception, the state supreme court noted that it is up to the legislature either to relax the statutory restrictions or to adopt additional exceptions to the prohibition-against-restraint rule under §16600.
California employers may still be able to prevent former employees from soliciting customers because California's Uniform Trade Secrets Act gives employers the right to protect certain company information, including, in some narrow circumstances, client lists. However, Edwards generally reaffirms the principle of employee mobility in California.
Edwards also discusses the permissible breadth of employee release agreements, holding that agreements in which employees release "any and all" claims do not waive statutory protections such as the employee indemnity protection of Labor Code section 2802. Accordingly, California employers should review their employment agreements to ensure they accomplish what is intended and are consistent with this decision.
Edwards affirms a 2006 Court of Appeal ruling; see our report on that opinion here.
On August 8, 2008, the Washington Department of Labor & Industries will issue a draft policy addressing the uncertainy created by the 2007 Washington State Supreme Court decision in Stevens v. Brink's Home Security regarding travel time in company vehicles. The draft policy is intended as a guide "in the interpretation and application of the relevant statutes, regulations, and policies and may not be applicable to all situations." The policy states that whether travel or commute time is compensable depends on the specific facts and circumstances of each individual employee, employer, and work week. If the travel or commute time is considered "hours worked" under the Washington statutes, then it is compensable. "Hours worked" means all hours when an employee is authorized or required by the employer to be on duty on the employer's premises or at a prescribed workplace. The policy lays out the three elements of the definition of "hours worked:"
1. An employee is authorized or required by the employer,
2. to be on duty,
3. on the employer's premises or at a prescribed workplace.
If any of the three elements is not satisfied, then the time spent driving in a company-provided vehicle is not considered "hours worked."
The policy states that "time spent driving a company-provided vehicle from the employers' place of business to the job site is considered hours worked. Time spent driving or riding as a passenger from job site to job site (if the job site is not at the employer's main business location) is considered hours worked." The policy further states that "time spent driving a company-provided vehicle during an employee's ordinary travel, when the employee is not on duty and performs no work while driving between home and the first or last job site of the day is not considered hours worked."
Employers should examine their personnel policies to be sure that employees have clear guidance regarding company vehicle use.
See our earlier post about the Brink's case here.
Almost exactly a year after we reported the Court of Appeals’ decision that payments to corporate directors are "wages" for the purpose of unemployment taxation, the Oregon Supreme Court reversed that decision. The Supreme Court held "that the legislature did not intend to include corporate directors, serving solely as directors, within the statutory definition of an ‘employee’ of a corporation for purposes of the unemployment tax, because directors are not ‘employed by’ the corporation in the same sense as other persons who provide ‘service for an employer*** for remuneration.’" The ruling brings Oregon law in line with federal tax law, under which directors serving in their capacity as directors are not "employees" and payments to directors are not wages for unemployment tax purposes.
You can access the Supreme Court’s Decision in Necanicum Investment Co. v. Employment Department here. To view our earlier report on the Court of Appeals decision, go here.
August 1, 2008 - Ernie Bootsma, chair of Ater Wynne's Emerging Business Group, will be the featured guest today on the innaugural show of StartUp Portland, a new business radio program for entrepreneurs, private investors and "those interested in getting into the game," according the show's website. The show is hosted by Ben Edtl, a local software entrepreneur and Ater Wynne client, who discusses the life and trials of the entrepreneur and interviews local guests on the front lines of emerging business and the local economy. StartUp Portland airs on KBNP/AM 1410 at 4 p.m. on Fridays. It is co-sponsored by Ater Wynne, the Oregon Entrepreneurs Network and 4/20 Design.