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Category Archives: Restrictive Covenants

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Restraint Payments in Australia – Compliance Issues

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

In the latest of our series of post-employment protection blog posts, we consider the compliance and regulatory issues that need to be thought through when drafting an effective post-employment restraint in Australia.

How will any restraint payment be structured?

The threshold question is what kind of payment (if any) to make in return for the agreement of an employee not … Continue Reading

Drafting and Litigating Post-Employment Restrictive Covenants in Australia – Tailoring Your Restraint to Ensure the Right Fit

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

By Michael Tamvakologos and Justine Giuliani

We will now look at the different types of post-employment restrictive covenants, and work through a checklist of questions employers should ask themselves when drafting a restraint to make sure it’s the right fit.

A good restraint is not about creating the ultimate “catch all” provision. Rather, it requires a series of good choices … Continue Reading

Leveraging Employment Restraints to Protect Business Assets

Posted in Practice & Procedure, Restrictive Covenants, Trade Secrets

When a key employee subject to an employment restraint leaves a business to join a competitor, fast decisions need to be made to protect client goodwill or guard against misuse of confidential information.

The more leverage an employer has against the former employee and his or her new employer, the better the prospects of negotiating a sensible solution quickly or, … Continue Reading

Best Practices Shared in Seyfarth Shaw’s 2015 Trade Secrets Webinar Series Year in Review

Posted in International, Legislation, Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Social Media, Trade Secrets

Throughout 2015, Seyfarth Shaw’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 nine webinars:

2014 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer… Continue Reading

Non-Disclosure Agreement Enforceable Although Unlimited In Time And Area

Posted in Restrictive Covenants, Trade Secrets

A salesman for a medical device manufacturer signed a confidentiality covenant at the time he was hired.  A dozen years later, he resigned and went to work for a competitor.  The former employer sued him in an Ohio federal court.  Because the covenant had neither temporal nor geographic limitations, the trial court invalidated the covenant and dismissed the breach of … Continue Reading

Australia Non-Compete Update: the Difference Between Winning and Losing Restraint Litigation is Often Good Housekeeping

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

By Michael Tamvakologos and Justine Giuliani

An enforceable restraint of trade can be a key business asset. Or some might think about it as an insurance policy. The capacity to preserve customer connections, protect confidential information and discourage key executives from setting up their own business or moving to a competitor can be critical to information rich businesses operating in … Continue Reading

Pennsylvania Supreme Court Rules That Continued Employment Is Not Sufficient Consideration for Non-Competes Entered Into After the Employment Relationship Has Begun

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

In a landmark ruling of first impression, the Pennsylvania Supreme Court recently held that an employer’s non-competition covenant, which included the employee’s pledge not to challenge the covenant for inadequate consideration, is unenforceable unless it is accompanied by a change in job status or some other significant benefit.  Socko v. Mid-Atlantic Systems of CPA, Inc., Case No. 3-40-2015 (Nov. 18, Continue Reading

Webinar Recap! State Specific Non-Compete Oddities Employers Should Be Aware Of

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

We are pleased to announce the webinar “State Specific Non-Compete Oddities Employers Should Be Aware Of ” is now available as a podcast and webinar recording.

In Seyfarth’s sixth installment, attorneys Michael Baniak and Paul Freehling discussed the significant statutory changes to several jurisdictions’ laws regarding trade secrets and restrictive covenants and pending legislation proposed in additional jurisdictions over … Continue Reading

Effective Carve-Outs to Seek Injunctive Relief from the Court in Arbitration Provisions

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

Christopher Pike: “That’s a technicality.”

Spock: “I am a [lawyer], sir. We embrace technicalities.”

Star Trek Into Darkness

Arbitration is no longer the final frontier. Instead, arbitration is often the first and only forum for resolving disputes. The business community has embraced arbitration as an alternative method of dispute resolution, but sophisticated parties still maintain a preference favoring court resolution … Continue Reading

Court Decries Ambiguity Of Terminology Used In Non-Compete Agreement And Injunction

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

A preliminary injunction was entered against a fired executive of a roofer who, immediately after he was discharged, went to work for an alleged competitor.  The district court held, and the Seventh Circuit agreed, that his non-compete and non-solicit agreements were overbroad and confusing, but that some injunctive relief nonetheless was warranted in this case.  Turnell v. CentiMark Corp., … Continue Reading

Is An Offer Of At-Will Employment Adequate Consideration For A Non-Compete? Recent Court Rulings Split Three Ways

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

Three very recent decisions reflect the irreconcilable division of judicial authority regarding the adequacy of at-will employment as the sole consideration for an otherwise valid non-compete.  Compare (a) Standard Register Co. v. Keala, No. 14-00291 (D. Haw., June 8, 2015) (adequate under Hawaii law) (“majority rule”), with (b) Hunn v. Dan Wilson Homes, Inc., Nos. 13-11297 and 14-10365 … Continue Reading

Texas Don’t Hold ‘Em: Forum Selection Clause Is Unenforceable

Posted in Non-Compete Enforceability, Restrictive Covenants

By: Joshua A. Rodine and Jonathan L. Brophy

California courts generally favor forum selection clauses entered into freely by parties and where enforcement is not unreasonable. This general principle is true even if the forum selection clause is “mandatory” and requires a party to litigate its dispute exclusively in the designated forum. The party opposing enforcement of a forum selection … Continue Reading

The Sounds of Silence: Non-Compete Reform Efforts Largely Absent in Massachusetts Legislature

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

Last summer was a busy time for legislators in Massachusetts mulling over non-compete reform. As we reported here and here, several competing bills were in play as the legislative session drew to a close, including a compromise bill that was passed in the state Senate but ultimately failed to advance in the House. You may even recall that then-Governor … Continue Reading

Legal 500 Names Seyfarth Shaw as a Finalist for Top Trade Secrets Litigation Department in the U.S.

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

The 2015 edition of The Legal 500 United States recommends Seyfarth Shaw’s Trade Secrets group as one of the best in the country.

Nationally, our Trade Secrets practice retained its position in Tier 2. For the second year in a row, our practice has been named to the shortlist for best trade secrets practice in the U.S., and we are … Continue Reading

Court Affirms California Attorney General’s Demand for Confidential Donor List

Posted in Restrictive Covenants, Trade Secrets

By: Ofer Lion, Douglas M. Mancino, and Christian Canas

Unwelcome news for charities concerned with donor confidentiality

A recent court ruling1 upheld the position of the California Attorney General (AG) requiring that charities located or operating in California provide a copy of their unredacted Form 990 Schedule B, including the names, addresses and contribution amounts for all donors … Continue Reading

Employee Social Networking: Protecting Your Trade Secrets in Social Media Webinar

Posted in Restrictive Covenants, Social Media, Trade Secrets

On Thursday, May 28, 2015 at 12:00 p.m. Central, in the fourth installment of our 2015 Trade Secret Webinars, Seyfarth attorneys John Tomaszewski, Eric Barton and Joshua Salinas will address the relationship between trade secrets, social media, and privacy.

The Seyfarth panel will specifically address the following topics:

Defining, understanding, and protecting trade secrets in social media, including a deeper… Continue Reading

Aggressive SEC Enforcement Efforts Regarding Confidentiality Agreements Will Continue

Posted in Practice & Procedure, Restrictive Covenants

By Ada W. Dolph

In a post-script to the SEC’s April 1 cease and desist order penalizing KBR, Inc. for a confidentiality statement that failed to carve out protected federal whistleblower complaints (our alert on it here), SEC Office of the Whistleblower Chief Sean McKessy today made additional comments that suggest public companies as well as private companies that … Continue Reading

Beware of the Delaware Choice of Law in Non-Compete Agreements

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

By Justin K. Beyer and Matthew I. Hafter

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

Non-Solicitation Covenant That Is Silent As To Its Scope May Be Unenforceable

Posted in Practice & Procedure, Restrictive Covenants

An employment agreement covenant prohibiting solicitation of co-employees, but not indicating what solicitations were prohibited, has been held to be invalid.

Status of the case.  A multi-count complaint filed in the D.C. District Court charged two former employees of the plaintiff with breaches of contract and tort violations.  The defendants moved to dismiss.   The court held that some of the … Continue Reading

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

Posted in Restrictive Covenants, Trade Secrets

On Tuesday, March 10th at 12:00 p.m. central, in the second installment of our 2015 Trade Secret Webinars, Seyfarth attorneys Scott Humphrey, Jason Stiehl and James Yu 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 will include:

Practical steps financial… Continue Reading

Appellate Court Re-Affirms Key Aspects of Georgia Non-Compete Law

Posted in Practice & Procedure, Restrictive Covenants, Trade Secrets

A recent decision by the Georgia Court of Appeals, Holland Ins. Group, LLC v. Senior Life Ins. Co., 766 S.E.2d 187 (Nov. 20, 2014), includes several excellent reminders regarding the enforceability (and unenforceability) of restrictive covenants in Georgia.

Relevant Facts and Holding

William Holland and Senior Life Insurance Company entered into an agreement (“Agreement”) authorizing Holland to sell Senior Life’s … Continue Reading

No Stick Without a Carrot: UK Court Refuses to Enforce Post-Employment Restrictive Covenants

Posted in Restrictive Covenants

The recent decision of the High Court in Re-use Collections Limited v. Sendall & May Glass Recycling Ltd. serves as a useful reminder for employers: restrictive covenants introduced during the employment relationship (rather than at the point of hiring) require specific consideration if they are to be enforceable. Under UK law, changes to employment terms require consideration if they are … Continue Reading

French Court Rules That A Confidentiality Clause Does Not Require Any Financial Compensation to Be Lawful

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

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

Non-Compete And Non-Solicitation Covenants Contained In Bovine Artificial Insemination Employment Agreements Held Unenforceable

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

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