The Illinois Business Law Journal

Non-Compete Agreements: Friend or Foe?

I. Introduction

In today's economical climate, the excitement of finding a new job can be overwhelming. Additionally, In the rush of starting work, it is easy to skim the fine print of a contract without fully understanding its terms. Non-compete agreements in employment contracts can cause much unnecessary and hardship on an individual once that individual chooses to switch jobs. Additionally, while it may seem unintuitive that an individual cannot use skills learned at one job to advance his career at another job, many companies rely on non-compete clauses to limit just that. This article will discuss the non-compete agreements generally, the history of non-compete agreements, and the legal standards state courts use in examining non-compete agreements. It will then discuss how to enforce and contest non-compete agreementsare. Finally, it will conclude by giving advice for the employer or employee who is unsure about how to approach a non-compete agreement.

Chipping Away at the RIAA's "Making Available" Theory of Copyright Infringement

I.    Introduction

On September 8, 2003, the Recording Industry Association of America (RIAA) filed copyright infringement lawsuits against 261 individuals for sharing songs on peer-to-peer (P2P) networks.[1]  In the five years since, the RIAA has sued, settled, or threatened litigation against over 30,000 Americans for alleged violations of the Digital Millennium Copyright Act.[2]  These actions have attracted a great deal of public attention, largely due to the fact that the suits have hit very close to home for many Americans.  Unlike prior lawsuits, which targeted software programs such as Napster and Grokster, this new chapter in the file-sharing saga has focused on ordinary people.[3]  The targets of the RIAA’s legal claims run the spectrum of everyday people who are not typically the subjects of copyright actions, including children, parents, grandparents, single mothers, professors, and college students.[4]

The RIAA’s strategic offensive against music consumers has spurred a firestorm of debate concerning topics such as copyright law, technology, privacy, and legal procedure.  For the first few years of the RIAA’s legal efforts, the focus of legal and social observers centered on the RIAA’s tactics for identifying and filing suit against potential defendants.[5]  In the last year, however, as contested cases have made their way through district court litigation, the focus has shifted to the interpretation of black-letter copyright law.  The RIAA’s “making available” theory of infringement has garnered a great deal of attention, though its acceptance by district courts has been inconsistent.  To date, the few district courts to rule on the matter have each interpreted the Copyright Act differently in the context of file-sharing, indicating that there is likely to be ongoing uncertainty until appellate level courts offer clarification.  For the moment, though the trend is moving away from acceptance of the "making available" theory, courts appear more willing to allow the RIAA to prevail on the basis of actual dissemination.

Merger Talks in Detroit Auto Business

I. Introduction

Since September, General Motors ("GM") and Chrysler's majority owner, Cerberus Capital Management have been in talks over the possibility of acquiring Chrysler. [1] Both companies are facing a financial crisis as both have suffered huge losses during this economic recession. [2] Moody's Investor Service stressed that GM would run out of operating cash next year without new sources of capital. [3] GM sees it merger with Chrysler as its bailout providing the company with revenue, cash flow, and cash reserves to make it through the coming year. [4] Merger talks have dealt with GM acquisition of Chrysler's auto business and Cerberus merger with lender Chrysler Financial Services and GM's ownership of GMAC Financial Services. [5] However, the question remains: how beneficial will the GM-Chrysler merger be to these companies. In this article, the advantages and disadvantages of the merger will be discussed.

Tamed Tigers: Sovereign Wealth Funds as Passive Investors

I. Introduction

The purpose of this article is to analyze the current role of sovereign wealth funds in a corporate governance scheme. Sovereign wealth funds, which have become increasingly important institutional investors in the United States, have found their activities in equities markets in the United States increasingly constrained due to stringent regulations.  While these sovereign wealth funds raise important policy considerations for lawmakers, these regulations hinder sovereign wealth funds in their role as investors.  Despite the power the sovereign wealth funds could hold in American companies, these funds have effectively become “tamed tigers.” Despite their enormous power, they simply cannot exercise it. Thus, this article will examine whether having sovereign wealth funds in a “tamed tiger” capacity should continue or whether regulations should encourage more activity from sovereign wealth funds.

Wall Street to Fraud Street: Disgruntled Investors Want Compensation

I. Introduction

With the financial crisis showing no signs of recovery many are worried about employment, job security, investments, and the overall economy. With the collapse of Lehman Brothers Holdings, the buyout of Merrill Lynch along with several other Wall Street firms, and the government bailout of American International Group, many are beginning to reevaluate and question Wall Street and the executives that run the corporations.[1] While the Bush administration was proposing a $700 billion bailout plan, investors began to point fingers at the wealthy corporate executives that pocketed millions of dollars while the companies they worked for crumbled.[2] Although there are several factors that played a part in the Wall Street crisis, investors are lining up to sue the executives with the deep pockets.[3] Two major issue at the center of heated discussion are: fiduciary duty and executive compensation.[4][5] 

New Stadiums, Higher Prices, No Remedy

I. Introduction

It seems like every sports franchise is building a new stadium these days. In New York alone, four franchises (the Yankees, Mets, Giants, and Jets) will be moving to three new facilities within the next two years. [1]. By 2011, other area teams including the Rangers, Liberty, Knicks, Nets, Devils, Islanders, and Redbulls will all be playing in new or renovated stadiums. [2] The allure of a new stadium cannot be denied: more luxury seating, refined amenities, state of the art technology on and off the field, attracting free agent athletes and corporate sponsors, and last but not least, the bragging rights to say "my home town ball park is better than yours!" Sadly, with new stadiums come new costs to fans of their sports, not the least of which is increased ticket prices. Additionally, apart from increased ticket prices, there are additional costs that come with new stadiums.

Banking Acquisitions during the Financial Crisis

I. Introduction

When the housing crisis was at its lowest point, entire neighborhoods were experiencing the possibility of foreclosure as residents defaulted on their mortgage payments. Foreclosures and consumer defaults have not only damaged the housing market but also have affected financial institutions. [1] The financial industry was hit particularly hard, especially leading subprime lending banking institutions. Washington Mutual, Freddie Mac, Wachovia, Bear Stearns, Countrywide and Merrill Lynch have been or are in the process of being acquired by big banks, strong enough to make the acquisition. [2] In this article, I will discuss the most recent acquisitions, Washington Mutual and Wachovia Corp., and analyze the benefits of this acquisition to the banking industry as well as the costs to consumers.

Salute Your Shorts

I. A Short Introduction

With the recent collapse of numerous financial institutions, the practice of short-selling (“shorting”) has come under fire. Some authors have gone so far to claim that the actions of short-sellers (“shorters”) are among the core reasons for the current credit crisis.[1] In response to this outcry, the United States has imposed temporary bans on the shorting of certain stocks, particularly the stocks of firms in the banking and finance sector, citing the need to protect investors and markets.[2] Furthermore, New York Attorney General Andrew Cuomo has launched an investigation into shorters for allegedly spreading false rumors in the financial market.[3]These enforcement responses prompt the question; do shorters have a legitimate role to play in a fair and open market?

The First Step to Success: Securing Funding For Your Small Business

I. Introduction

Anyone who has considered starting a new business can attest to the excitement that comes along with being one's own boss, setting one's own hours, and turning a personal dream into reality. However, once the initial thrill wears off, the daunting task of ensuring enough preliminary funding and finding continued financing for the business can quickly turn this dream into a nightmare. This article will discuss the ways in which a small business can obtain initial funding and continued financing. First, it will stress the importance of creating a substantial business plan to which potential investors and sources of funding can look to learn about the business. Second, it will discuss debt options for funding and financing a business. Third, it will discuss equity options for funding and financing a business. Finally, it will conclude summarizing the options for funding for a start-up business and continued financing of a new business.

Political "Celebrity" Ads and the Right of Publicity

I. Introduction

With the 2008 presidential campaign expected to break spending records, it is no surprise that both major political parties are flooding swing-state airwaves with television advertisements.  While recent elections have produced the much-discussed "swift boat" and "3 a.m." commercials, the McCain campaign took a unique approach with the summer release of the so-called Barack Obama "celebrity" ad.[1] In response to the enthusiasm generated by large U.S. and European crowds at Obama's public appearances, the McCain campaign featured images of Britney Spears and Paris Hilton in an ad that characterized Obama as "the biggest celebrity in the world."[2]  Such unauthorized use of celebrity images in political advertisements has been the subject of recent debate, as any potential legal actions implicate the tension between the right of publicity and the First Amendment.

The Government Response to the Wall Street Crisis

I. Introduction

In the past few weeks, the media has been bombarded with news about the events on Wall Street.  The failure of such large entities as Washington Mutual, Bear Stearns, and IndyMac has left many people bewildered and afraid.[1]  Naturally unsettled by deepening concerns over the financial markets, many people are worried about both their financial assets and the future of the economy.  While these events are unexpected, the government seems fully preparing to take charge and protect the financial market.  In addition to the consumer protections now in place, the government has also planned a $700 billion dollar bail-out plan to bolster the financial market.[2]  This article looks at the guarantees government agencies provide to consumers, some of the effects this crisis is having, and finally at the intervention measures that government is currently planning.

The Journal Completes its 2007-2008 Publication Year, Begins Summer Hiatus

The Business Law Journal of the University of Illinois  has concluded its regular publication cycle for the Spring 2008 semester. The Journal will resume its full publication schedule in the Fall when classes begin.

Please join us in Congratulating the Editorial Board for the 2008-2009 publication year!

• Editor in Chief: Karen Lee
  
• Managing Editor: Joseph Krcmar
  
• Executive Editors: Yoo Jin Jung, Patrick Schuette, and Scott Wilson

We thank you for visiting the Journal and encourage you to explore our archives. Please feel free to post your comments or send us questions at buslaw@law.uiuc.edu.

We continue to accept articles submissions from students, professors, and practitioners. If you are a student at the University of Illinois College of Law and are interested in joining the Business Law Journal for the upcoming publication year, please contact us at buslaw@law.uiuc.edu.

The Business Law Journal of the University of Illinois  has concluded its regular publication cycle for the Spring 2008 semester. The Journal will resume its full publication schedule in the Fall when classes begin.

Please join us in Congratulating the Editorial Board for the 2008-2009 publication year!

• Editor in Chief: Karen Lee
  
• Managing Editor: Joseph Krcmar
  
• Executive Editors: Yoo Jin Jung, Patrick Schuette, and Scott Wilson

We thank you for visiting the Journal and encourage you to explore our archives. Please feel free to post your comments or send us questions at buslaw@law.uiuc.edu.

We continue to accept articles submissions from students, professors, and practitioners. If you are a student at the University of Illinois College of Law and are interested in joining the Business Law Journal for the upcoming publication year, please contact us at buslaw@law.uiuc.edu.

Please join us in Congratulating the Editorial Board for the 2008-2009 publication year!

• Editor in Chief: Karen Lee
  
• Managing Editor: Joseph Krcmar
  
• Executive Editors: Yoo Jin Jung, Patrick Schuette, and Scott Wilson

We thank you for visiting the Journal and encourage you to explore our archives. Please feel free to post your comments or send us questions at buslaw@law.uiuc.edu.

We continue to accept articles submissions from students, professors, and practitioners. If you are a student at the University of Illinois College of Law and are interested in joining the Business Law Journal for the upcoming publication year, please contact us at buslaw@law.uiuc.edu.

The Sophisticated User Doctrine: Fair or Fowl

Introduction

Keith Wilson is a well trained ventilation and air conditioning (HVAC) technician. [1] Trained both on and off the job, Mr. Wilson had the highest certification available from the Environmental Protection Agency ("EPA"), a training that required passing a five-part examination. [2] His qualifications allowed him to purchase, braze, weld and replace parts on large commercial air conditioning systems. [3] These air conditioning systems use R-22, a hydrochloroflourocarbon refrigerant that can decompose into phosphane gas when exposed to heat, as is often the case when a technician brazes or welds an air conditioning system. [4] Exposure to phosphane gas and R-22 can cause numerous health problems which are detailed in Material Safety Data Sheets (MSDS's). [5] The California code requires employers to use the MSDS's to train their employees about the chemicals and dangers they can be exposed to on the job. [6] Mr. Wilson received a MSDS every time he purchased R-22 and he even read it on occasion. [7].

After years of being exposed to R-22, Mr. Wilson developed pulmonary fibrosis and sued the chemical manufacturers, suppliers and air conditioning unit manufacturers including the defendant, American Standard, Inc. [8] His contention was that the companies failed to adequately warn him of the dangers of being exposed to R-22. [9] The defendant moved for summary judgment claiming that it had no duty to warn to Mr. Wilson of the dangers of R-22 and as a professional HVAC technician, he should have known of the dangers of the chemical. [10] On appeal, the California Supreme Court agreed with the defendant reasoning that Mr. Wilson was a sophisticated user, one who knew or should have known of the dangers of being exposed to R-22, and as such, the manufacturer/distributor should and will be held blameless for exposing him to the chemical. [11]

Blockbuster's $1 Billion Bid on Circuit City

I. Introduction

     On April 14, 2008 Blockbuster Inc. announced publicly its offer to purchase electronic retailer Circuit City Inc. Blockbuster has been in talks with Circuit City for months regarding an acquisition. [1] On February 17, 2008 Blockbuster sent a letter to Circuit City Chairman Philip Schoonover offering over $1 billion for the transaction. [2] This is equivalent to $6 to $8 a share in cash for the company. [3]Blockbuster also stated that they were willing to pursue alternative deal structures to enable Circuit City shareholders to receive stock. [4] Circuit City is hesitant about the deal and has yet to reveal to Blockbuster its long-term corporate plans and performance data. [5] This paper will evaluate the benefits and negatives of the acquisition as well as discuss whether this merger should occur.

Home Is Where the Most Economically Beneficial Laws Are: Finding the Best Location to Incorporate Your Business

I.  Introduction

There are very few requirements for a business to be incorporated in a given state.  The business must usually have a registered agent in that state, but rarely are there requirements to construct an office or actually engage in commercial transactions. [1]  From the outset, it seems as though finding the best location to incorporate a business would be quite simple.  This prediction, however, could not be farther from the truth.  Finding the right place to "set up camp" is a long and crucial process; but if done properly, the initial research can lead to the creation of a business that uses state law to its advantage rather than demise.