(Authors' note: Since the publishing of this post, the legislation outlined below was signed into law by Governor Jay Inslee on May 8, 2019)
On April 17, the Washington Legislature approved sweeping new restrictions on employers’ non-competition agreements with their employees and independent contractors.
The bill, now headed to the Governor’s desk for his expected signature, means that after January 1, 2020, non-competition agreements (see definition and limitations below) will only be enforceable against higher-paid employees and contractors, and generally can last no longer than 18 months.
The law also carries a sting: If a court or arbitrator finds that a covenant violates these new rules, the entity which seeks enforcement of such a provision may be liable for actual or statutory damages and attorneys’ fees and costs.
This week’s Update features a number of stories on important developments in the EU. Enjoy.
Sabre’s Previously Announced Acquisition Runs Into Regulatory Trouble
("Sabre's Farelogix purchase draws 'killer acquisition' questions from UK watchdog," MLex Insight, April 19, 2019) (subscription required)
Several months ago, we featured a story detailing the evolution of the airline distribution industry and in particular, the growing rivalry between legacy (read: old) global distribution systems (like Sabre) and airlines they serve over airlines’ attempts to bypass the global distribution systems through the use of emerging technologies (like the new distribution capability (NDC) offered through Farelogix). In a somewhat ironic move, Sabre announced plans in November of last year to acquire Farelogix for $360 million. The US Department of Justice and now the UK’s Competition and Markets Authority (and possibly other EU regulators) have begun to ask questions about the proposed deal and its potentially stifling effects on competition within the distribution industry (aka “killer acquisition”). There are many potential lessons to be learned here for the distribution industry generally, which is why we will continue to feature stories updating the status of Sabre’s efforts.
Other than the news that Marriott and Expedia completed negotiations over their new contract (congratulations to Marriott for getting this behind you), this past week was relatively quiet on the distribution front. Enjoy.
Traveloka Challenges OTA Acronym
("Southeast Asia’s Online Travel Agency Traveloka Moves Into Food, Wellness Choices," News, APril 10, 2019)
Indonesia-based Traveloka is challenging what it means to be an online travel agent. The OTA recently added tours and activities to its traditional travel offerings and has begun targeting users in its domestic markets through the addition of lifestyle products (e.g., food, beauty, movies). In Indonesia, where Traveloka’s “discovery” platform was first introduced, users can purchase discounted restaurant vouchers, read reviews of local restaurants, and book a wide range of lifestyle products and services offered by many of the country’s traditional retailers. Content for the platform is sourced directly from suppliers and vendors or indirectly through other third-party channels. Traveloka plans to roll out its discovery platform to other Southeast Asian countries, including Australia. If attempts by Traveloka (and AirAsia) to diversity their user base through the addition of lifestyle products and services proves successful, how long will it be before the more traditional global distributors follow their lead?
Expedia Unable to Stop Withholding of Critical Airline Data
("U.S. judge rules against Expedia in United Airlines fare listings lawsuit," Reuter US News, April 5, 2019)
In the continuing saga of United Airline versus Expedia, a federal judge in NYC ruled last week that Expedia was not entitled to a court order prohibiting the airline for cutting off access to critical fare and schedule data following the September 30 contract termination. According to the court, while Expedia was able to demonstrate a “likelihood of success” on the merits of its breach of contract claim, it was not able to satisfy the requirements needed for an immediate injunction. More to come...
This past week was relatively quiet on the distribution front. Have a great week everyone.
Online Travel Agencies Drawn into Indonesian Antitrust Probe
MLex Insight on Mar 26, 2019
Indonesian online travel agencies have now been drawn into a widening probe into various allegations of anticompetitive behavior in the country’s aviation industry.
About the Editor
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.