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Category Archives: Restrictive Covenants

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Customer Non-Solicitation Covenant Runs From Date Employment With Asset Seller Terminated, Not From Later Date Employment With Asset Purchaser Ended

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

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

“Bridgegate” Triggers Proposed Expansion of New Jersey Whistleblower Protections

Posted in Practice & Procedure, Restrictive Covenants, Trade Secrets

By Ada W. Dolph, Robert T. Syzba and Jade Wallace

In an effort to preempt another “Bridgegate” scandal, New Jersey State Senator Loretta Weinberg has sponsored a bill to extend whistleblower protection to employees who disclose incidents of wasted public funds, governmental abuse, or gross mismanagement. On October 9, 2014, the New Jersey Senate’s Labor Committee approved Bill S-768, which, … Continue Reading

When “The End” Is Not “The End”: Asserting Trade Secret Claims After The Execution of a Mutual Release

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

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

Kansas Federal Court Denies Preliminary Injunction For Alleged Violation Of Confidentiality And Non-Compete Covenants under Canadian Law

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

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

Webinar Recap! International Trade Secrets and Non-Compete Law Update

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

We are pleased to announce the webinar “International Trade Secrets and Non-Compete Law Update,” is now available as a podcast and webinar recording.

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

United Kingdom Update on Contractual Notice Periods and Restrictive Covenants

Posted in International, Non-Compete Enforceability, Restrictive Covenants

An employee cannot ‘walk out’ and refuse to work to avoid their notice period and the restrictive covenants contained in their contract of employment.

In Sunrise Brokers LLP v Rodgers [2014] 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

Seyfarth Attorneys Present on Latest Developments in Trade Secrets and Non-Compete Law At ABA Annual Meeting

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

Seyfarth partners Robert Milligan and Kate Perrelli will lead a CLE program for the ABA IPCentral Conference during the ABA’s Annual Meeting in Boston on August 7th.

They are scheduled to be joined by in-house counsel Pamela Davidson from U.S. Foods, Karen Tompkins from Stryker, Lisa Seilheimer from CDW, and Jerry Cohen from Burns & Levinson LLP.

The panel will … Continue Reading

Upcoming Webinar: Protecting Confidential Information and Client Relationships in the Financial Services Industry

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

On Tuesday, August 26, 2014 at 12:00 p.m. Central, Seyfarth attorneys Scott Humphrey, Jason Stiehl and Rebecca Woods will present the sixth installment in its series of 2014 Trade Secret Webinars. They will focus on trade secret and client relationship considerations in the banking and finance industry, with a particular focus on a firm’s relationship with its FINRA members.  Topics … Continue Reading

Liquidated Damages, A Permanent Injunction, and Attorneys’ Fees Awarded For Violating Non-Disclosure/Non-Compete Agreement And Preliminary Injunction

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

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

Once You’ve Made Your Restrictive Covenant Bed You Must Lie Upon It…

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

The traditional approach taken by the English Courts to restrictive covenants was confirmed in the decision of the Court of Appeal in Prophet plc v Huggett [2014] EWCA Civ 1013. The Court of Appeal overturned a High Court judge’s decision that the words “or similar thereto” should be added to the relevant clause in order for it to make … Continue Reading

Eleventh Circuit Affirms Alabama Federal Court Ruling that Non-Compete Signed Prior to Employment is Void

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

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

Webinar Recap! Trade Secret and Non-Compete Legislative Update

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

We are pleased to announce the webinar “Trade Secret and Non-Compete Legislative Update” is now available as a podcast and webinar recording.

In Seyfarth’s fourth installment of its 2014 Trade Secrets Webinar series, Seyfarth attorneys discussed the significant changes to several laws regarding trade secrets,  restrictive covenants, and social media, as well as proposed legislation pending in other jurisdictions.… Continue Reading

Divided Appellate Court Voids Employer’s Non-Compete Covenants Because One Employee Did Not Sign

Posted in Non-Compete Enforceability, Restrictive Covenants

In a decision marked not-for-publication, a Minnesota Appeals Court affirmed the trial court’s invalidation of a two-year non-competition agreement signed by a long time employee.  He was discharged 11 years after he signed.  He then went to work for a competitor of his former employer.  The majority reasoned that the non-compete lacked independent consideration since it was not executed by … Continue Reading

Hiring Employees with Non-Compete Agreements: Tread Lightly

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

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

Unemployment Compensation Awarded To Ex-Employee Refusing Employer’s Order To Execute Non-Compete Covenant

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

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

Breakfast Briefing: Protecting Your Most Valuable Assets — Trade Secrets, IP and Your Employees

Posted in Practice & Procedure, Privacy, Restrictive Covenants, Trade Secrets

Significant recent developments in Illinois and other states, as well as Congress, have changed the landscape of trade secret and restrictive covenant enforcement and protection. Understanding the impact of these changes, and the tools now available to employers for trade secret and restrictive covenant enforcement and protection, will help a company safeguard its most valuable assets and maintain its competitive … Continue Reading

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 … Continue Reading

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 … Continue Reading

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 Continue Reading

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 … Continue Reading

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, Continue Reading

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 … Continue Reading

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 … Continue Reading

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 … Continue Reading