PEOPLE OF THE STATE OF NEW YORK
OFFICE OF THE ATTORNEY GENERAL
LABOR BUREAU
INTHE MATTER DF THE INVESTIGATION OF ASSURANCE OF
ERICT. SCHNEIDERMAN, ATTORNEY. DISCONTINUANCE
GENERAL OF THE STATE OF NEW YORK. PURSUANT TO
ECUTIVE LAW § 63(15)
oF
PORTFOLIO MEDIA, INC. AOD No. 16-106
ASSURANCE OF DISCONTINUANCE
Inthe fll o£ 2015, the Office of the Attomey General of the State of New York
(Attomey General” or “OAG") commenced an investigation of ww aw360,com, a legal
‘news website wholly owned and operated by Portfolio Media, Ine., pursuant to New York
Executive Law § 63/12). This Assurance of Discontinuance (“Assuranes") contains the Attomey
General's findings in connection with his investigation, and the relief agreed to by the Atlomey
General and Portfolio Media, In.
EVAN
MEWORK
1. A-nos-compete agreement is a contract that prohibits an employee from working
fora competing employer within a certain period oF time after leaving his or her job." In New
‘York, a non-compete agreement is enforceable only “Yo the extent that its reasonable in time
and area, necessary» protect the employer's legitimate interests, not harmful to the general
public and not unreasonably burdensome to the employee.” Reed, Roberts Associates, In. v,
‘Srauman, 40 N.Y.24 303, 307 (NY. 1976). The policy considerations underlying the “judicial
Llisfavor” of such agreements revolve around the importance of “competition engendered by the
"Now-ConpeteAgsceneis- Atay ofthe Use, Poel Isis. and State Resse.” May 2016, valle a
‘sas uhchuns go ss at ited May 11,2046),
PORTYOLIO MEDIA INC. - ASSURANCE OF DISCONTINUANCE - PAGE LUuninhibited flow of services, talent and ideas.” Kd. As such, 2 non-compete agreement that “does
‘no more than baldly restrain competition” is unenforceable. Columbia Ribbon & Carhon Mii,
Cov. Acl-A Coup, 42 N.Y.24 496, 499 (N.Y. 1977), Further, the issue of what comprises an
‘employer's “legitimate interests” is interpreted narrowly
2. Pursuant so New York Executive Law § 63(12). the Attorney General has broad
investigatory authority to protect the interests of New York workers consumers, and the general
Public, and 10 ensure public safety and welfare
FINDINGS:
3. Portfolio Medi, Ine. operates www Law360.com ("LaW340"). «website that
provides legal news and analysis to subscribers? Law360's main office is in New York City. fa
the fall of 2015, the OAG began an investigation of Law340's use of non-compete. As part of
the investigation, the OAG served a subpoena duces tect and ad festifcandum in December
2015. Law360 cooperated in producing documents responsive to the subpoena. Those documents
‘revealed that snee 2011, Law360 has roquted all senior staff and all editorial stat sign an
agreement containing 9 Covenant Not to Compete (“Non-Compete”) asa condition of
‘employment, Senior sta consists ofthe General Manager, Ditector of Sales, Sales Manager,
Senior Director of Product Engineering, Senior Human Resources Manager, General Counsel
Assistant Director of Product Marketing, Assosiate Director of Marketing Services, and Chief
Financial Officer positions. Editorial staff consists of the Editor in Chief, Administrative
Assistant, Managing Editor, Assistant Managing Editor, Senior Reporter, Reporter, Third Party
Content, Copy Chie, Training Editor,
- Graphies Chief, Senior Graphies Editor, and News
Assistant positions. Law360 currently employ’ approximately 157 senior and editorial staff
‘While Porflio Medi. fs he legal erty blige oli th tm of shi Asurance, Lay340 isthe entity
‘shih he OAG's nestgation forte Ths, hs Aas the atl Seta ofthe investigation eer
[a6 andthe legal gation relero ws oaner, Poole Medi. ae.
PORTFOLIO MEDIA INC. ASSURANCE OF DISCONTINUANCE PAGE 24. The Non-Compete prohibits al senior and editorial ste, for one year ater
leaving Law360 and in any geographical area where Law360 conducts busines, from working
for a“Direct Competitor.” where “Direet Competitor” is defined as “any person or entity.
hich directly competes with (or has taken afimative steps in proposing or planing 1 compete
‘with the Company in providing legal news and data services, or engages in other business
activites identical, substantially similar, or reasonably reat, in whole or in prt tothe Business
Activites engaged i, oF under development by the Company.” and where “Business Activities
ate defined as “the development, production, publication, marketing, design, and sale" of daily
legal news and data services.
5. During the investigation, the OAG also interviewed sever rank-and-file editorial
cmployees, all of whom reported to the OAG tht they have litle to no knowledge of any trade
secrets or confident information regarding the technology that underpins Law360"s operations
6. During the investigation, Laye360 reported that it took steps to enforce the Non-
‘Compete narrowly and in limited manner designed 10 protect its competitive interests, and that
it heieved it was protecting confidential and strategically sensitive information.
PROSPECTIVE RELIEF
WHEREAS, The Attomey General has conclud thatthe Non-Compete is overly broad
‘with regard to certain Law360 employees, because it does not meet the criteria set forth in Rea,
Roberts Associates, ine. v. Stauman, 40 N.Y.2U 303 (N.Y. 1976) (ee supra paragraph 1):
WHEREAS, Portfolio Media, Inc. neither admits nor denies the Attorney General's
Findings and conclusion as set forth aboves
WHEREAS. the parties wish to obviate further investigation and to avoid the expense
sand inconvenience o* potential litigation;
PORTFOLIO MEDIA INC. ASSURANCE OF DISCONTINUANCE - PAGE?WHEREAS, the Attomey Generali willing to accept the tens ofthis Assurance
‘pursuant to New Yerk Executive Law § 63(15) and to discontinue his investigation of Portfolio.
Media, Ine and
WHEREAS, the panties believe that he obligations imposed by this Assurance are
-praent and appropyite
ITIS HEREBY UNDERSTOOD AND AGREED, by and between Portfolio Medi, Ine.
and the OAG, a flows:
7. Lawi60 shall discontinue is use of the Non-Compete, oF any other non-compete,
‘with respect to all current and former editorial employees, withthe exception of individuals
curently holding the Falitor
‘ef, Managing Editor aud Graphies Chief positions. Following
the signing ofthis Assurance and for a peviod of three yeas thereafter (the “Term” ofthis
Assurance), Law360 will notify the OAG thirty (30) days in advance oF offering any edit
employees, with the exception of the positions of Editor-in-Chief, Managing Editor, and
pies Chief, with an agreement containing the Non-Compete or any other non-compete,
8, Nothng inthis Assurance prohibits Law360 from requiring non-editrial senior
stato sign the Non-Compete, including employees holding the positions of General Manager,
Director of Sales, Seles Manager. Senior Director of Product Engineering, Senior Human
Resources Manager, General Counsel, Assistant Director of Product Marketing. Associate
Director of Marketing Services, and Chiet Financial Officer. Law's Staff Accountant, who
had previously been designated a member of senior staf, shall no longer be subject to the Non-
Compete.
9. Within iteen (15) business days of signing this Assurance, Law360 shall send a
PORTFOLIO MEDIA, INC. - ASSURANCE OF DISCONTINUANCE - PAGEnotice to all current employes
and t all former emplayees whose termination (whether
‘voluntary or involuntary) occured within the twelve-month period preceding the signing ofthis
Assurance, Such novice shall inform such employees thatthe Non-Compete is no longer in effect,
4s described above in paragraphs 7 and 8. Law360 shall provide such notice by e-mail to former
employees last knowin email adress, except that if Law360 doesnot have a current email
ares for any former employee, such noice shall be provided by regular US. postal service to
their ast known U.S, postal adress, Within five (S) business days of the completion of sending
such notices, Law30 shall send a confirmation to the OAG that the notice has been sent as
‘required hy this parsgraph, Sixty (60) days subsequent to signing this Assurance, Law 360 shall
provide to the OAG the names of any former employees for whom notice was returned as
undeliverable
ther by e-mail or U.S, mai.
10. Law360 shall not use the Non-Compete of any non-compete with respect to new