Employment contracts are different from most other types of commercial contracts. A host of unique rules apply to employment contracts. At the end of the day, though, they are still contracts and must adhere to the basic rules of contracts, even if those rules are sometimes applied in different ways. This is particularly true when discussing non-compete clauses.
In the aftermath of California’s aggressive attempts to crack down on the “gig” economy, other states have moved as well, though often in different directions. While many states have moved to pass laws specifically designed to protect the status of “gig” workers, New Jersey is in the process of passing its own attempt to regulate these workers. Indeed, the proposed New Jersey legislation would go so far that it would classify almost all workers in the state as employees and make it incredibly difficult for someone to claim independent contractor status.
It was expected that California’s Assembly Bill 5 passed late last year would spawn tons of litigation. The law radically changed how workers from uber drivers to television show writers were classified. Those negatively impacted by the law aggressively lobbied for changes and exemptions while planning litigation should their lobbying efforts fail.
While the world steps through the global pandemic, we know our clients are facing the same questions, concerns, and decisions that we are grappling with. The collective safety of our employees, families, clients, and your business interests weigh heavily on everyone’s mind. Disaster planning can only take you so far when experiencing anything of this magnitude.
How does insurance play into the events unfolding? Insurance policies address coverage in general terms. The specific circumstances around each loss or situation will determine whether or not coverage applies. However, in general terms, we’d like to share an overview of the potential claims issues in various lines of coverage and how those policies might respond.
There has been an ongoing fight over how to define employees for the past few decades. As technology has re-shaped the workforce, this fight has gotten more intense. State and federal governments have struggled to set clear lines dividing independent contractors from employees for a number of purposes, including taxation and the application of workplace benefits. These benefits and taxes add on average 20% to 30% to the cost of hiring and paying a worker.
In most civil cases, courts are careful to ensure that plaintiffs cannot benefit from a double recovery. That is to say, plaintiffs do not get to recover for the same injury twice. The purpose of a negligence lawsuit is to restore a person to the state they were in prior to suffering their injuries by compensating them for those injuries. This is one reason why insurance companies retain rights of subrogation.
Given the relative newness of cyber insurance policies, comparatively little case law exists interpreting these policies in the context of claims. Courts have sometimes struggled with how to interpret unique policy provisions in the context of variations of computer fraud. While some courts have taken highly technical approaches to the language contained in the policy, other courts have taken a more relaxed approach based on the understanding of the parties. A recent case out of the Eleventh Circuit Court of Appeals highlights these issues. Principle Solutions Group, LLC v. Ironhorse Indemnity, Inc. tackled a claim dispute between an insured business and an insurance company involving a cyber claim.
Claims made insurance coverage can create some confusing issues. A claims made policy covers claims that are made against the policy during the period of the policy’s effective dates. This is in distinction to an occurrence policy, which covers claims based on the policy in effect when the incident giving rise to the claim occurred.