Header graphic for print
Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Category Archives: Restrictive Covenants

Subscribe to Restrictive Covenants RSS Feed

D.C. Circuit Upholds NLRB Finding that Employment Agreement’s Confidentiality and Non-Disparagement Provisions Violated the NLRA

Posted in Restrictive Covenants

Cross Posted from Employer Labor Relations Blog.

Seyfarth Synopsis: The U.S. Court of Appeals for the D.C. Circuit recently denied Quicken Loans, Inc.’s petition for review of an NLRB decision finding that confidentiality and non-disparagement provisions in the company’s Mortgage Banker Employment Agreement unreasonably burdened employees’ rights under Section 7 of the NLRA.

Back in 2013, an NLRB administrative … Continue Reading

Webinar Recap! Enforcing Trade Secret and Non-Compete Provisions in Franchise Agreements

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

As a thank you to our valued readers, we are pleased to announce the webinar “Enforcing Non-Compete Provisions in Franchise Agreements” is now available as a podcast and webinar recording.

In Seyfarth’s seventh installment in its series of Trade Secrets Webinars,  Seyfarth attorneys John Skelton, James Yu and Dawn Mertineit focused on the importance of State specific non-compete laws … Continue Reading

Court Upholds Non-Compete Giving Former Employer Discretion To Determine Whether Ex-Employee Is Working For A Competitor

Posted in Non-Compete Enforceability, Restrictive Covenants

A severance agreement executed in connection with a Stark Truss employee’s resignation included a one-year non-competition clause.  It allowed the company unfettered discretion to decide if his new employer was a competitor and, if so, to terminate his severance.  The ex-employee took another job and sued Stark Truss in an Ohio court, seeking a declaration that he was entitled to … Continue Reading

Upcoming Webinar: Enforcing Trade Secret and Non-Compete Provisions in Franchise Agreements

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

On Tuesday, June 21, 2016 at 12:00 p.m. Central, Seyfarth attorneys, John Skelton, James Yu and Dawn Mertineit will present the seventh installment of the 2016 Trade Secrets Webinar series. This program will focus on protecting a franchisor’s trade secrets, confidential information, and goodwill through the use of covenants against competition.

The Seyfarth panel will specifically address the following topics:… Continue Reading

Bring Out the Body Bags: Seller’s Covenant, In Asset Sales Agreement, Not To Compete Within 150 Miles For 10 Years Unenforceable

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

Palmetto bought the assets of Knight Systems’ mortuary transport business. The agreement of purchase and sale included (a) Palmetto’s commitment to buy body bags, at specified discounted prices, exclusively from Knight Systems for 10 years, and (b) Knight Systems’ promise not to provide mortuary transport services within 150 miles of Palmetto’s offices for the same period.  Notwithstanding the non-compete covenant, … Continue Reading

Webinar Recap! Trade Secrets, Restrictive Covenants and the NLRB: Can They Peacefully Coexist?

Posted in Restrictive Covenants, Social Media, Trade Secrets

By Gary Glaser, James McNairy and Marc Jacobs

We are pleased to announce the webinar “Trade Secrets, Restrictive Covenants and the NLRB: Can They Peacefully Coexist?” is now available as a podcast and webinar recording.

In Seyfarth’s fifth installment of its 2016 Trade Secrets Webinar series, Seyfarth attorneys, Gary Glaser, Jim McNairy and Marc Jacobs, conveyed … Continue Reading

Georgia’s Restrictive Covenants Act Turns Five Years Old: Assessing the Impact of Georgia’s Law Five Years On

Posted in Non-Compete Enforceability, Restrictive Covenants

While the federal Defend Trade Secrets Act is garnering a great deal of attention, it’s worthwhile to remember that state law remains critically important in drafting restrictive covenants.  This week, May 11, 2016, marks the fifth anniversary of Georgia’s revised trade secrets act, which fundamentally recast how courts view and enforce restrictive covenants.

Prior to enactment of the new law, … Continue Reading

No Microscope Needed to See Why This Non-Compete Is Unenforceable

Posted in Non-Compete Enforceability, Restrictive Covenants

When is a microscope not needed? When the problem one is looking at is big as an elephant, not small as an amoeba.

Nion, an electron microscope manufacturer, contracted with Gatan, a spectrometer manufacturer, to use Gatan’s spectrometers in Nion’s microscopes. The contract contained both confidentiality and non-compete clauses. When Gatan learned that Nion had sold other parties microscopes that … Continue Reading

White House Issues A Call To Arms With Respect To Non-Competes

Posted in Legislation, Non-Compete Enforceability, Restrictive Covenants

On May 5, 2016, the White House issued a report largely piggybacking on a recent U.S. Treasury Department study, on which we previously posted, with a primary focus on the purported misuse and negative impacts of non-compete agreements.  The White House report reiterated much of what the Treasury Department covered its March 31, 2016 study, and focused on … Continue Reading

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, … 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