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Pro-biz ruling In a unanimous pro-business decision, the Florida Supreme Court has ruled that corporations that acquire other companies through stock buyouts or mergers may enforce noncompete agreements reached under the previous management. The court ruled that corporations may bar employees from quitting and setting up shop within the same market under noncompete agreements they signed with prior employers. It ruled that it was not necessary for noncompete agreements signed before 1996 to include an assignment clause in order for a new corporation to enforce its terms. An assignment clause would have indicated that the contract was binding with the employer’s successors. Corporate Express Office Products Inc. v. Phillips, No. SC01-2741. race bias reversal Finding that a jury’s verdict in a race discrimination suit was “fatally inconsistent” because it cleared all of the individual defendants but found the employer liable, the 3d U.S. Circuit Court of Appeals has overturned a verdict of more than $300,000 against the Philadelphia Housing Authority (PHA). “A finding of intentional discrimination requires a finding that at least one person acting as the PHA’s agent had a discriminatory animus” toward the plaintiffs, Judge Maryanne Trump Barry wrote in an unpublished decision.”If the jury concluded, as it did, that none of the three individual defendants had a wrongful intent, and no other PHA agent could plausibly be at fault, then the PHA cannot be liable.” Barry’s opinion was joined by judges Jane R. Roth and Julio M. Fuentes. The case involved two white men who claimed that they were denied promotions within the PHA because of a claim of race discrimination they had made against the agency. Paladino v. PHA, No. 02-1822. corporate compliance After considerable debate, an American Bar Association (ABA) task force has issued recommendations on corporate compliance. The report urges routine opportunities for chief legal officers to communicate in executive sessions with corporate boards and for outside counsel to communicate with chief legal officers so as to facilitate an internal flow of information about wrongdoing by the corporation or its executive officers, an ABA press release said. Additionally, it urges amending the ABA Model Rules of Professional Conduct to: 1. Conform to the ethical rules of a majority of the states by permitting lawyers to reveal information to prevent criminal or fraudulent conduct that is reasonably certain to result in substantial injury to the financial interests of others when the lawyer’s services are being used to further the fraud or crime. 2. Clarify when corporate lawyers must disclose conduct up the ladder of authority and when corporate lawyers may disclose externally conduct by the corporation or its executives. These recommendations and others will be presented to the ABA House of Delegates at the association’s annual convention in San Francisco in August.

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