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 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 a well-written recent opinion concerning violation of both a confidentiality/non-compete agreement and a preliminary injunction, a federal judge explained in detail why she was awarding liquidated damages, entering a permanent injunction, and assessing legal fees.
Summary of the Case
Two financial planners, one an individual and the other a corporation, negotiated a merger of their businesses. Before being provided … Continue Reading
A consultant of a company entered into a consulting agreement with a competitor. The scope of his consultancy of the first company involved dairy-permeate processing systems and the second involved lactose-processing systems. The Court of Appeals of Minnesota found that these businesses were sufficiently distinct such that disclosure of information regarding one business would not violate the non-compete agreement prohibiting … Continue Reading
In Hallmark Cards Inc. v. Monitor Clipper Partners LLC et al., 2014 WL 3409953 (8th Cir. July 15, 2014), the U.S. Court of Appeals for the Eighth Circuit affirmed a $31.3 million dollar jury verdict, which included $10 million in punitive damages, in favor of Hallmark Cards, Inc. (“Hallmark”) against a private equity firm known as Monitor Clipper Partners … Continue Reading
An employee entered into non-compete and confidentiality agreements with his employer. Following his resignation from that company, he went to work for a competitor. His job functions and territory with both employers were similar. In a suit for violation of the non-compete and confidentiality agreements, a Texas federal court held recently that — absent an injunction — disclosure to his … Continue Reading
When the Walt Disney Company built the “It’s a Small World” ® ride for the New York World’s Fair in 1964, they probably had no idea of the challenges that globalization could pose 50 years later. From cases involving the sale of stolen trade secrets to foreign companies to departing employees setting up competing business in different jurisdictions, many … Continue Reading
In a recent ruling by the Supreme Court of Kentucky, Creech v. Brown (June 19, 2014), the court affirmed that in Kentucky, noncompetition agreements must be supported by adequate consideration in order to be enforceable. The circumstance addressed by the court involved an employee who was presented with a noncompetition and confidentiality agreement after working for the employer for … Continue Reading
Voting is open for the American Bar Association’s Annual 100 Best Legal Blogs competition. You helped us get named to the list in 2013, and we hope you will cast your vote today to help keep Seyfarth’s Trading Secrets blog on the ABA’s list for 2014.
Trading Secrets is a resource for employers and legal professionals that provides timely legal … Continue Reading
In a case out of Florida involving the rapper known as “50 Cent” an arbitrator found the rapper liable for trade secret misappropriation, among other claims, in the creation of his own line of headphones. The arbitrator awarded, the plaintiff in the case, Sleek Audio, LLC, a little over $11.5 million in damages. Attorney’s fees were … Continue Reading
A Texas federal trial court, finding the absence of any legal precedence to award an ongoing royalty in a trade secret misappropriation case, looked to the patent laws to impose an ongoing royalty. As a result, rather than permanently enjoining the misappropriator from continuing, the trial court imposed a royalty, thereby allowing the victim some compensation but allowing the other … Continue Reading
A few months ago, we reported on a federal court decision in the Southern District of Alabama declining to enforce a non-compete and non-solicitation agreement against a former employee who executed the agreement before he began his employment. Last week, a panel of the Eleventh Circuit affirmed the District Court’s decision in an unpublished opinion.
As we reported following … Continue Reading
A defendant company was unaware, when it hired two individuals, that they had entered into non-competition agreements with their prior employer. As a result, according to a Florida federal court, the prior employer did not have a valid cause of action against the new employer for intentionally interfering with those non-compete obligations.
Summary of the Case
During their employment by … Continue Reading
Employee mobility in the pharmaceutical industry is a significant concern for employers given the industry’s very significant investment in and reliance upon generating and protecting confidential, proprietary and trade secret information that is used to develop products and create and maintain customer relationships.
Non-competition and customer non-solicitation agreements are one of the primary tools available in most states to protect … Continue Reading
As we have previously reported, in April of this year, Massachusetts Governor Deval Patrick introduced a sweeping economic growth bill (HB4045) that, if passed, would ban employee non-competes in the Commonwealth. The bill has taken a somewhat convoluted path to date, and we wanted to update you on some notable twists and turns.
First, in mid-May, yet another bill … Continue Reading
A state court issued a preliminary injunction for alleged trade secret misappropriation, but the enjoined parties successfully used post-injunction discovery to convince the court that the complaint was baseless. Those parties then filed a federal court lawsuit for abuse of process and other torts. In Peek v. Whittaker, Case No. 2:13-cv-01188 (W.D. Pa., May 22, 2014), the court held … Continue Reading
The former employer failed to prove that the parties entered into an effective non-compete agreement, and also failed to prove that the ex-employee had disclosed or had threatened to disclose trade secrets. But, an Ohio federal judge entered a preliminary injunction forbidding her, until further order, from contacting her former employer’s clients and certain of its prospects. PharMerica Corp. v. … Continue Reading
Georgia’s restrictive covenant statute turns three years old this week and Seyfarth Shaw partner Bob Stevens offers insight into the significant changes in the law and how Courts are interpreting those changes. The legal changes are not only significant but anecdotal evidence from trial courts reflects that at least some trial courts view the change in law as an almost … Continue Reading
On Thursday, June 19, 2014 at 12:00 p.m. Central, Laura Maechtlen and Michele Haydel Gehrke will present the webinar Bring Your Own Device Policies. As employees have widely adopted personal mobile devices such as smartphones and tablets, there has been a parallel trend of employers allowing (or requiring) their employees to use their own personal mobile devices at work. This … Continue Reading
Excited about the prospect of a talented new hire and think that her non-compete doesn’t affect you? Think again. Under Virginia law, a future employer, who is aware of a prospective employee’s non-compete agreement, risks legal liability for tortious interference of contract and, through that, business conspiracy.
In DePuy Synthes Sales, Inc. v. Jones, 2014 WL 1165852 (E.D. Va. Mar. … Continue Reading
California is a unique jurisdiction because of its public policy against certain employee noncompetition agreements and post-termination restrictions on employee mobility. This general prohibition against noncompetes with employees leaves trade secret laws as the primary mechanism for employers with California based employees to protect against the unlawful use or disclosure of valuable company information … Continue Reading
Don’t want to sign that new non-compete agreement that your employer just rolled out? Unempoyment compensation may be an option at least according to one new court decision.
An employee does not necessarily forfeit unemployment compensation if he or she is discharged, or resigns rather than waiting to be discharged, for declining to sign a mandated restrictive covenant. Darr v. … Continue Reading
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., … Continue Reading