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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Category Archives: Restrictive Covenants

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Upcoming Webinar: Restrictive Covenants and the NLRB: Can They Peacefully Coexist?

Posted in Restrictive Covenants, Trade Secrets

Recent National Labor Relations Board (NLRB) law in the area of employee handbooks and policies brings new challenges for employers as to how they can best protect their trade secrets and enforce restrictive covenants in their employment agreements without running afoul of the National Labor Relations Act.

On Tuesday, May 10 at 12:00 p.m. Central, Seyfarth attorneys Gary Glaser, James … Continue Reading

Court Won’t Enjoin Physician Who Breached Non-Compete Covenant And Consented To Injunction

Posted in Non-Compete Enforceability, Restrictive Covenants

A physician signed a non-compete covenant, agreed to be enjoined if he breached, and allegedly did breach. But when his former employer asked a Providence, Rhode Island Superior Court judge to enter an injunction, he refused to prevent patients from being treated by a doctor of their own choosing. Medicine & Long Term Care Associates, LLC v. Khurshid, Civil … Continue Reading

You Can’t Put Lipstick On This Pig: Beauty Company’s Non-Compete Deemed Unenforceable

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

On March 25, 2016, a Massachusetts Superior Court judge struck down skin care salon Elizabeth Grady Face First, Inc.’s (“Elizabeth Grady” or the “Company”) attempt to make its non-compete agreement seem prettier than it actually is.  In denying Elizabeth Grady’s motion for a preliminary injunction, the court stressed that employees’ conventional job knowledge and skills, without more, will not constitute … Continue Reading

North Carolina Courts Are Forbidden To “Blue Pencil” An Unenforceable Non-Compete

Posted in Non-Compete Enforceability, Restrictive Covenants

Reversing a 2-1 decision of the North Carolina Court of Appeals, the state’s Supreme Court held unanimously that an assets purchase-and-sale contract containing an unreasonable territorial non-competition restriction is unenforceable.  Further, a court in that state must strike, and may not modify, the unreasonable provision. Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, No. 316A14 (N.C. … Continue Reading

New Utah Law Limits Restrictive Covenants to a One-Year Period

Posted in Legislation, Restrictive Covenants

On March 9, 2016, Utah enacted the Post-Employment Restrictions Amendments, which limits restrictive covenants to a one-year time period from termination. Any restrictive covenant that is entered into on or after May 10, 2016, for more than one year will be void. Notably, the new law does not provide for a court to blue pencil an agreement, rather the agreement … Continue Reading

Extensive Training Of Ex-Employee By Former Employer Not Enough For Injunction Against Competition

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

Although an employer spent many hours assisting an employee to obtain a real estate appraiser’s license, the Tennessee Court of Appeals held recently that the employee’s restrictive covenants were unenforceable.  Davis v. Johnstone Group, Inc., No. W2015-01884-COA-R3-CV (Mar. 9, 2016).

Summary of the case.  The ex-employee, Davis, had no prior real estate appraisal experience in 1998 when he started … Continue Reading

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

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

On Thursday, April 14 at 12:00 p.m. Central, Seyfarth attorneys, Scott Humphrey, Marcus Mintz and Kristine Argentine will present the fourth installment of the 2016 Trade Secrets Webinar series. This program 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.

The Seyfarth … Continue Reading

Ex-Employee Hit With Six-Figure Judgment For Violating His Non-Competition Agreement By Helping His Son Compete

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

A long-running non-compete clause dispute has reached the Louisiana Court of Appeal three times.  Last month, the court affirmed a $600,000 judgment, plus attorneys’ fees and costs, against an ex-employee who assisted his son’s start-up company compete with his father’s former employer.  Pattridge v. Starks, No. 50,351-CA (Louisiana Court of Appeal, Feb. 24, 2016) (Endurall III).

Summary of the … Continue Reading

Webinar Recap! 2015 National Trade Secret, Non-Compete and Computer Fraud Law Year in Review

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

We are pleased to announce the webinar “2015 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law” is now available as a podcast and webinar recording.

In Seyfarth’s first installment of its 2016 Trade Secrets Webinar series, attorneys Robert Milligan, Jesse Coleman and Joshua Salinas reviewed noteworthy … Continue Reading

Five Easy Tips for Improving Your Company’s Non-Compete and Confidentiality Agreements and Related Practices Now

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

As January quickly passed by and new projects increase by the day, there is still a golden opportunity to capitalize on some low-hanging fruit to immediately improve your company’s practices and add immediate value to your company.  The opportunity lies in improving your company’s restrictive covenant and confidentiality agreements and confidentiality policies.  Below are five tips that you can employ … Continue Reading

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