November 2011

7th Circuit Reminds District Court: Manifest Disregard of the Law Is Not Grounds for Vacating an Arbitration Award

November 10, 2011

One of the risks of electing to resolve a dispute in arbitration is that, apart from a few narrow exceptions, the decision of the arbitrator is non-appealable.  This can be very hard on the losing party, who believes the arbitrator completely misapplied the law or, in the terminology of the courts, “manifestly disregarded” the law. Affymax believed it was faced with such a situation when an arbitration panel ruled in favor of Otho-McNeil-Janssen on certain issues in a complicated patent dispute.  Affymax challenged the panel’s decision, and the federal district court reversed part of the arbitration panel’s award. Wrong, said Chief Judge Easterbrook of the 7th Circuit Court of Appeals in Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., decided on October 3, 2011:  “Manifest disregard of the law” is not a ground on which a court may reject an arbitrator’s award.  The First Circuit, where I practice, has made this clear as well.  See Ramos-Santiago v. United Parcel Service, 524 F.3d 120, 124 n.3 (1st Cir. 2008) (“manifest disregard of the law is not a valid ground for vacating or modifying an arbitral award in cases brought under the Federal Arbitration Act”).

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Cases Cited in My 2011 MCLE Noncompete Chapter Update

November 7, 2011

Earlier this year Massachusetts Continuing Legal Education  (MCLE)  asked me to update my 2009 chapter on Employee Noncompetition Agreements.   The revised chapter, part of the 2-volume Massachusetts Employment Law series, was published in June. Below are links to the cases I added to this chapter.   I’ve also included a sentence or two regarding each case.  However, I did not make an effort to describe every legally significant aspects of each case. Ethicon Endo-Surgery, Inc. v. Pemberton, 27 Mass. L. Rptr. 541 (Super. Ct. 2010).  This case, decided by Judge Peter Lauriat  in the Suffolk Business Litigation Session, applies New Jersey non-compete law, but Massachusetts procedural law for purposes of ruling on a preliminary injunction.  The former employee filed suit in California first, but Judge Lauriat  refused to dismiss this case based on the “first filed” rule.  The court enforced an 18 month covenant not to compete against the former employee. Inner-Tite Corp. v. Brozowski, No. 2010-0156 (Worcester Super. Ct. 2010).  This lenghy decision was written by Judge Janet Kenton-Walker, sitting in Worcester County, following a bench trial.   The judge enforced a one year convenant not to compete against an employee who had worked for Inner-Tite in Georgia.  Given Brozowski’s  relatively low salary, and the fact that he was asked to sign the non-compete after beginning work for Inner-Tite, this contract would not have been enforceable under the various proposed…

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