Delaware has long been one of the jurisdictions most friendly to the interests of corporations and is the state of incorporation for a significant majority of corporations. While that trend does not seem likely to change, a new Delaware Chancery Court decision should give pause to choice of law decisions of Delaware … Continue Reading
Status of the cases. In one of the two lawsuits, the employment agreement included a Tennessee choice of law provision. Louisiana courts are more protective of employees than courts in Tennessee. Since the parties had contacts with both states, naturally … Continue Reading
The 2014 Year in Review is a compilation of our significant blog posts from throughout last year and is categorized by specific topics such as: Trade Secrets Legislation; Trade Secrets; Computer Fraud and Abuse Act; Non-Compete & Restrictive Covenants; Legislation; International; and Social Media and Privacy. As demonstrated by specific blog entries, including our Top 10 Developments/Headlines and Trade Secrets, … Continue Reading
Courts are divided on the enforceability by an assignee of a non-compete covenant relating to personal services where the covenant does not state whether it is assignable and the employee does not consent to the assignment.
Status of the case. A non-compete agreement signed by an employee of TSG, Inc., purported to be effective for two years after his termination … Continue Reading
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 2014. Please join us for our complimentary webinar on January 27, 2015, at 1:00 p.m. e.s.t., where we will discuss them in greater detail. As with all of our other webinars (including the … Continue Reading
Plaintiff’s motion to enforce a settlement agreement in principle was denied because some material terms of that agreement were not included in the version the plaintiff sought to enforce. GeoLogic Computer Sys., Inc. v. MacLean, Case No. 10-13569 (D. Mich., Dec. 10, 2014).
Status of the case. Counsel for the parties to a software copyright infringement lawsuit purportedly reached … Continue Reading
Throughout 2014, 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 10 webinars:2013 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete,… Continue Reading
Other than to protect good will or trade secrets, a non-compete provision intended to prevent a former employee from acquiring an interest in, or becoming an officer or director of, a competitor of the ex-employer may not be enforceable.
Summary of the case: A stand-alone agreement executed by employee-participants vested in their employer’s profit-sharing plan contained an unusual non-compete provision. … Continue Reading
Courts will decline to enforce contractual restrictive covenants in agreements that unreasonably restrain trade or lack adequate consideration.
Innovation Ventures (IV), developer of an energy drink, entered into contracts with a bottler and with a production consultant. Both contracts contained non-compete and confidentiality clauses. Shortly after the bottler’s and consultant’s business relationships with IV ended, IV … Continue Reading
As many readers will know, non-compete clauses in employment contracts are only valid in France if, among other conditions, an employee receives a financial consideration of 40 to 60% salary depending on the sector and the role for the duration of the restriction. But do confidentiality clauses need to be subject to the same treatment?
The recently published decision of … Continue Reading
At some point in his or her legal education, every law student discovers one of the more strikingly unique rules about the profession that he or she aspires to enter. Unlike laws governing physicians, accountants, engineers, and virtually all other professions, rules governing the practice of law impose a nearly absolute prohibition on lawyer non-compete agreements. At the same time, … Continue Reading
Several ex-employees now may compete with their former employer, and may solicit its employees and customers, after a federal judge in the Eastern District of Washington held that the restrictive provisions in their employment agreements are unenforceable.
The agreements, drafted by the former employer, contained a choice-of-law provision which the former employer tried unsuccessfully to invalidate. The court also held … Continue Reading
An employee executed an employment agreement which included a two-year covenant not to solicit the employer’s customers. When the employer sold the company’s assets, the sale included that agreement. The employee then went to work for the assets purchaser but subsequently resigned. The Texas Appellate Court held that the two-year period began to run on the date the assets seller … Continue Reading
In many cases, the execution of a mutual release is often the last step in resolving a trade secret or non-compete case. Typically included in the release is an affirmation that all confidential information has been returned and the once former adversaries promise not to sue one another. Once the release is executed, the fight is usually over. Usually, but … Continue Reading
In a recent Texas federal court ruling, a competitor closely aligned with, and seemingly assisted by, a signatory of a non-compete covenant narrowly avoided a preliminary injunction because the assistance was not shown to have been substantial.
Summary of the case. In connection with the purchase and sale of a partnership’s assets, a partner of the seller signed a covenant … Continue Reading
A Florida franchisee executed a franchise agreement (FA) containing a non-compete provision and a Pennsylvania forum selection clause. Following termination of the FA, the former franchisee’s wife opened a similar business in another part of Florida. The franchisor filed suit in Pennsylvania against the former franchisee and his wife, and they moved to dismiss or, alternatively, to transfer the case … Continue Reading
An employee who had executed a two-year non-compete was let go. He returned to work 10 days later but was not asked to sign a new agreement. More than two years after his return, he was terminated and became an employee of a competitor. A lawsuit seeking to enforce the non-compete was dismissed on the ground that it had expired.… Continue Reading
The North Carolina Court of Appeals held that the covenant’s territorial restriction was overbroad. Notwithstanding the state’s “strict blue pencil doctrine,” which limits a judge’s authority to revise a non-compete clause, the appellate court … Continue Reading
As you may recall, we recently reported that Massachusetts legislators’ attempts to pass a bill altering the landscape of non-compete enforceability (including Governor Deval Patrick’s bold push to ban non-compete agreements altogether) failed yet again. As has become a nearly perennial event in the Commonwealth, efforts to push legislation through by the close of the session were frenzied, but ultimately … Continue Reading
As a special feature of our blog –special guest postings by experts, clients, and other professionals –please enjoy this blog entry about non-compete covenants in India by technology and corporate attorneys Sajai Singh and Soumya Patnaik of J. Sagar Associates in Bengaluru, India. Sajai serves as the President of ITechLaw, a leading technology law organization. This entry is part one … Continue Reading
In China, employers may require the employee to continue to perform the non-compete obligation and pay liquidated damages in accordance with the non-compete agreement after breach occurs.
In the past, however, the following uncertainties could impede the employer from … Continue Reading
The plaintiff corporation — now a Delaware LLC based in Kansas — was headquartered in Alberta, Canada at the time its employees signed agreements containing confidentiality and non-compete covenants. The agreements designated the applicable law to be that of Alberta. When its ex-employees allegedly violated the covenants, the plaintiff sued them and their new employer in a Kansas federal court. … Continue Reading
The fifth webinar in the 2014 series, was presented by Wan Li, Ming Henderson, Justine Turnbull and Daniel Hart, focused on non-compete and trade secret considerations from an international perspective. Specifically, the webinar involved a discussion … Continue Reading
In Sunrise Brokers LLP v Rodgers  EWHC 2633 the High Court held that an employer does not have to accept that a ‘walk out’ by an employee will terminate the contractual relationship. The employer has … Continue Reading