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Category Archives: Non-Compete Enforceability

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Ohio Court Issues Significant Non-Compete Decision: Damages for a Breach are the Payor’s Lost Profits, Not the Amount of Consideration

Posted in Non-Compete Enforceability, Practice & Procedure

The usual measure of monetary damages for violation of a covenant not to compete, even where the violator was paid a discreet sum for the covenant, is the amount that puts the injured party in the same position it would have been in if the contract had been performed.  Briggs v. GLA Water Management, 2014 Ohio 1551 (Ohio App., …

Massachusetts Governor Proposes Sweeping Legislation Banning Non-Compete Agreements

Posted in Legislation, Non-Compete Enforceability, Trade Secrets

By Katherine E. Perrelli, Dawn Mertineit and Erik W. Weibust

Last week, Massachusetts Governor Deval Patrick proposed sweeping legislation that would eliminate employee non-compete agreements in Massachusetts.  While it remains to be seen whether this bill will actually become law, employers should be aware of the potential implications of this far-reaching bill, and should implement steps sooner rather than …

Update: Massachusetts Governor Proposes Sweeping Legislation Banning Non-Compete Agreements

Posted in Legislation, Non-Compete Enforceability, Trade Secrets

By Katherine Perrelli, Dawn Mertineit, and Erik Weibust

As we reported last week, Massachusetts Governor Deval Patrick has proposed sweeping legislation that would eliminate employee non-compete agreements in Massachusetts.  Now that we have had an opportunity to review the Governor’s bill, entitled “An Act to Promote Growth and Opportunity” (HB4045), we wanted to report back on its …

Breaking News: Massachusetts Governor Deval Patrick to Propose Legislation Eliminating Non-Compete Agreements in Certain Industries

Posted in Legislation, Non-Compete Enforceability, Trade Secrets

By Dawn Mertineit and Erik Weibust

The Boston Globe reported this morning that Massachusetts Governor Deval Patrick will propose legislation today that would eliminate non-compete agreements in technology, life sciences, and “other industries,” with his secretary of Housing and Economic Development, Greg Bialecki, stating that the administration “feel[s] like noncompetes are a barrier to innovation in Massachusetts.”  No word just …

Webinar Recap! National Year in Review of Recent Cases/Developments in Trade Secrets, Non-Compete, and Computer Fraud Law

Posted in Computer Fraud and Abuse Act, Non-Compete Enforceability, Social Media, Trade Secrets

By Michael Wexler, James McNairy and Joshua Salinas

We are pleased to let you know that the webinar “2013 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law” is now available as a podcast and webinar recording.

In Seyfarth’s first installment of its 2014 Trade Secrets …

Australia Non-Compete Primer: Protecting Your Business Interests Post-Employment

Posted in Non-Compete Enforceability, Restrictive Covenants, Trade Secrets

By Justine Turnbull and Cassie Howman-Giles

Given difficult economic times, protection of confidential information (including trade secrets) has become a greater priority for business in Australia. As a result, post-employment restraint litigation is increasingly common as employers attempt to protect their confidential information and restrain former employees from soliciting the business of their valued clients.

This note outlines the position …

Beware: Over-Inclusive Non-Compete Agreement May Be Unenforceable

Posted in Non-Compete Enforceability, Restrictive Covenants

An employment agreement non-competition provision stated that, for 18 months after termination, the employee shall not become employed by or act “directly or indirectly, as an advisor, consultant, or salesperson for, or become financially interested, directly or indirectly, [in an entity] engaged in the business of selling flavor materials.” Earlier this month, the North Carolina Court of Appeals held that …

Top 10 Developments/Headlines in Trade Secret, Computer Fraud, and Non-Compete Law in 2013

Posted in Breach of Fiduciary Duty, Computer Fraud, Computer Fraud and Abuse Act, Cybersecurity, Data Theft, Espionage, International, Legislation, Non-Compete Enforceability, Practice & Procedure, Privacy, Restrictive Covenants, Social Media, Trade Secrets, Unfair Competition

By Robert Milligan and Joshua Salinas

As part of our annual tradition, we are pleased to present our discussion of the top 10 developments/headlines in trade secret, computer fraud, and non-compete law for 2013. Please join us for our complimentary webinar on March 6, 2014, at 10:00 a.m. P.S.T., where we will discuss them in greater detail. As with all

Texas And North Carolina Appellate Courts Repulse Efforts To Enforce Restrictive Covenants

Posted in Non-Compete Enforceability, Restrictive Covenants

In two unrelated cases decided earlier this month, employers failed in their attempts to enjoin former employees from competing. The Texas First District Court of Appeals vacated parts of the lower court’s injunction order, one part because it did not detail with sufficient specificity the conduct that was enjoined, and another part where the order was sufficiently specific but erroneously …

Upcoming Webinar: 2013 National Year in Review — What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law

Posted in Computer Fraud, Computer Fraud and Abuse Act, Cybersecurity, Espionage, International, Legislation, Non-Compete Enforceability, Practice & Procedure, Social Media, Trade Secrets

On Thursday, March 6, 2014 at 12:00 p.m. Central, Michael Wexler, Jim McNairy and Josh Salinas will present Seyfarth’s first installment of its 2014 Trade Secrets Webinar series. They will review noteworthy cases and other legal developments from across the nation this past year in the areas of trade secret and data theft, non-compete enforceability, computer fraud, and the interplay …

2013 Trade Secrets Webinar Series – Year in Review

Posted in Computer Fraud and Abuse Act, Cybersecurity, International, Legislation, Non-Compete Enforceability, Practice & Procedure, Privacy, Restrictive Covenants, Social Media, Trade Secrets

Throughout 2013, Seyfarth Shaw LLP’s dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant issues facing clients today in this important and ever changing area of law.

The series consisted of twelve webinars:

1. 2012 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets,

Federal Court in Alabama Rules That Non-Compete Signed Prior to Employment is Void

Posted in Non-Compete Enforceability, Restrictive Covenants

By Bob Stevens and Dan Hart

For many in Alabama, the holiday season does not end until after the college football national championship game, which has featured one of the state’s two top college football programs (the Auburn University Tigers and the University of Alabama Crimson Tide) for each of the five past years. While not quite as exciting as …

Massachusetts Judge Rules That Updating LinkedIn Does Not Constitute Solicitation

Posted in Non-Compete Enforceability, Restrictive Covenants, Social Media

Judge Thomas P. Billings, of the Massachusetts Superior Court’s Business Litigation Session, recently declined to issue a preliminary injunction in a non-compete case brought by KNF&T Staffing, Inc. against its former employee, Charlotte Muller, who had left to join a competitor. Among other things, KNF&T alleged that Muller had updated her profile on LinkedIn to reflect her new position, “resulting …

Georgia Federal Court Disregards Forum Selection Clause In Non-Compete And Non-Solicitation Covenant Dispute

Posted in Non-Compete Enforceability, Restrictive Covenants

Notwithstanding a forum-selection provision in the parties’ consulting agreement designating the Northern District of Georgia as the place for litigating non-competition and non-solicitation covenants disputes, a Georgia federal judge transferred covenant violation litigation to the Middle District of Florida. Also, the judge explained why he thought that an arbitration clause was unenforceable, but he said that the Florida court should …

Top Five Trends in Georgia Restrictive Covenants Law Three Years After Constitutional Amendment

Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants

By Bob Stevens and Dan Hart.

Three years ago last week, Georgia voters overwhelmingly approved a constitutional amendment that substantially altered Georgia’s public policy on restrictive covenants.

Prior to enactment of the amendment, Georgia’s public policy was actively hostile to restrictive covenants in employment agreements — so much so that a provision of the state constitution enshrined the state’s …

When does LinkedIn Activity Violate Non-Solicitation Agreements?

Posted in Non-Compete Enforceability, Practice & Procedure, Social Media, Trade Secrets

LinkedIn is the biggest professional networking site in the world.  It has more than 225 million users in more than 200 countries and territories.  Approximately 75 million users are in the United States.  Many of those users have signed non-solicitation agreements with their employers prohibiting them from soliciting the employers’ customers and workers.  Unfortunately, many of those non-solicitation agreements are …

13 Scary Years Ago Court Issued Death Sentences In Horrid Dispute Over Vampire Fangs.

Posted in Non-Compete Enforceability, Practice & Procedure

Once upon a midnight dreary, in the annus horribilis of 2000, the United States District Court for the District of Colorado issued its terrifying decision in what is the seminal artificial vampire fangs case entitled Nutting v. RAM Southwest, Inc., 106 F. Supp. 2d 1121 (D. Col. July 10, 2000).

 The plaintiff in this chilling tale, Mr. Nutting, was the …

Illinois Supreme Court Won’t Take Up Non-Compete Case, Adequate Consideration Questions Remain

Posted in Non-Compete Enforceability, Practice & Procedure

Once a stalwart of adequate consideration in exchange for a restrictive covenant, new employment, remains in flux after the Fifield v. Premier case was not taken up by the Illinois Supreme Court recently. 

Fifield, decided in the summer of 2013 by the First District Appellate Court, held that in order for employment to be adequate consideration for a non-compete, employment …

Virginia Supreme Court Rules Enforceability of Non-Competes Cannot Be Determined in a Factual Vacuum

Posted in Non-Compete Enforceability, Practice & Procedure

A recent Supreme Court of Virginia decision will make it more difficult to challenge non-compete restrictions through early pleading challenges.

In Assurance Data, Inc. v. Malyevac, the Supreme Court of Virginia reversed the Circuit Court of Fairfax County, which sustained a demurrer, and, in doing so, determined the enforceability of certain restraints on competition contained in an employment agreement on …

Federal Appellate Court Lacks Jurisdiction To Hear Appeal of Expired Non-Compete Preliminary Injunction

Posted in Non-Compete Enforceability, Practice & Procedure, Trade Secrets

The Eleventh Circuit recently dismissed an appeal of a preliminary injunction order on the grounds that the appeal was moot because the injunction had expired.

Summary of the case.  Leedom Management, a credit card processing company serving automobile dealers, sued a former employee and charged her with violating covenants not to (a) compete with Leedom, (b) solicit its clients, and …

First Circuit Holds that Solicitation is Barred by Non-Compete Agreement Regardless of Who Initiates Contact

Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants

In Corporate Technologies, Inc. v. Harnett, et al., U.S. Court of Appeals for the First Circuit recently upheld the issuance of a preliminary injunction barring a former employee (Harnett) from doing business with his former employer’s (CTI) customers, even if the customers initiated the contact. 

CTI had employed Harnett as an account executive/salesman for nearly a decade, and required that …

Referring Former Employer’s Customers To New Employer Held Violation Of Injunction, Resulting In Finding Of Criminal Contempt

Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants

A recent Louisiana non-compete case involving two appellate decisions addresses three significant issues in non-compete litigation: 1) whether a former employee’s referral of customers to a new employer violated the employee’s non-solicitation of customer covenant; 2) the consequences of violating the covenant and court injunction; and 3) the appropriate standard of proof for contempt proceedings.

Summary of decision. Five years …

Is Massachusetts Inching Closer to California? Governor Deval Patrick Issues Public Support for the “Outright Elimination” of Non-Compete Agreements

Posted in Legislation, Non-Compete Enforceability, Practice & Procedure, Trade Secrets

We attended a hearing today before the Massachusetts Legislature’s Joint Committee on Labor and Workforce Development regarding the pending non-compete legislation on which we have previously posted

Among others who testified about the issue was Governor Deval Patrick’s Secretary of Housing and Economic Development, Gregory Bialecki. 

Mr. Bialecki finally acknowledged publicly what the Patrick Administration has been dancing around …

Upcoming Webinar: How and Why California is Different When it Comes to Trade Secrets and Non-Competes

Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Trade Secrets

On Tuesday, September 24, 2013, at 12:00 p.m. Central, Seyfarth attorneys Mark Hansen, Jim McNairy, and Jessica Mendelson will present the ninth installment in our 2013 Trade Secrets webinar series. They will focus on ways in which California trade secret law is similar to and diverse from other jurisdictions, including a discussion of the California Uniform Trade Secrets Act, trade …