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Category Archives: Restrictive Covenants

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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 Last week, a panel of the Eleventh Circuit affirmed the District Court’s decision in an unpublished opinion.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

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 … Continue Reading

Judgment on Willful And Malicious Trade Secret Claim Is Not Dischargeable In Bankruptcy

Posted in Practice & Procedure, Restrictive Covenants, Trade Secrets

Bankruptcy is intended to provide a fresh start and discharge outstanding debt.  But some debt is not dischargeable in bankruptcy.  A Virginia bankruptcy court held last week that a judgment against the debtor for intentional trade secret misappropriation is not dischargeable.

Summary of the case.  La Bella Dona Skin Care, Inc. obtained a $207,000 judgment in a Virginia state court … Continue Reading

How Do I Get a TRO Against a Former Employee If Arbitration in FINRA Is Mandatory?

Posted in Breach of Fiduciary Duty, Practice & Procedure, Restrictive Covenants, Trade Secrets

By Nicholas De Baun

Occasionally, you may need emergency relief against a former employee who has absconded with a client list, your confidential information, and the clients themselves. If you are very unlucky, you may need to get a TRO against his new employer as well. If you, the former employee, and the new employer are all required to arbitrate … Continue Reading

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 … Continue Reading

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 … Continue Reading

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 … Continue Reading

Nosal Update: Court Denies Motion for Acquittal and New Trial in Marathon CFAA and Trade Secret Misappropriation Criminal Case – Part II

Posted in Computer Fraud and Abuse Act, Data Theft, Espionage, Restrictive Covenants, Trade Secrets

In Part I of this post, we reviewed the Court’s ruling on Nosal’s conviction on the CFAA counts. Here in Part II, we turn to the Court’s ruling on the EEA counts, and the exclusion of evidence regarding Nosal’s non-compete provision.

B.    Nosal’s Conviction on the EEA Counts:

Nosal was convicted of two counts under the EEA for downloading, copying … Continue Reading

New Hampshire Court Voids Non-Compete Clause in Independent Contractor Agreement

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

A recent New Hampshire decision serves as a reminder that courts may treat non-compete provisions differently in the context of independent contractor agreements compared to employment agreements.

Summary.  The Presiding Justice of the New Hampshire Superior Court held earlier this month that, under the circumstances of the case before him, a non-compete covenant imposed restraints on an independent contractor “greater … Continue Reading

Upcoming Complimentary Webinar: Trade Secret and Non-Compete Considerations in Asia

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

To accommodate our global audience, Seyfarth’s eighth installment in its 2013 Trade Secrets Webinar Series will be available as an on-demand broadcast this month! On Tuesday, August 27, 2013, Seyfarth attorneys Dominic Hodson, Wan Li, and Robert Milligan will discuss non-compete and trade secret issues in China, including best practices to protect trade secrets and confidential information in the country. … Continue Reading

Employment Agreement Mandating Arbitration With Exclusion To Seek Equitable Relief From Court For Non-Compete Violations Found Unconscionable

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

Summary:  Tatum, an employee of ProBuild, purportedly blew the whistle on her subordinate for allegedly stealing from ProBuild.  Shortly thereafter, she was fired, but alleged similarly situated male employees were not.  She filed a gender discrimination suit in a New Mexico state court. ProBuild removed the case to federal court and then moved to compel arbitration based on the mandatory … Continue Reading