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

Tag Archives: consideration

Rebecca Woods on Recent Kentucky Supreme Court Decision Holding that Non-Compete Failed for Lack of Consideration

Posted in Non-Compete Enforceability, Practice & Procedure

In a recent ruling by the Supreme Court of Kentucky, Creech v. Brown (June 19, 2014), the court affirmed that in Kentucky, noncompetition agreements must be supported by adequate consideration in order to be enforceable. The circumstance addressed by the court involved an employee who was presented with a noncompetition and confidentiality agreement after working for the employer for … 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 Last week, a panel of the Eleventh Circuit affirmed the District Court’s decision in an unpublished opinion.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

Ohio Court Issues Significant Non-Compete Decision: Damages for a Breach are the Payor’s Lost Profits, Not the Amount of Consideration

Posted in Non-Compete Enforceability, Practice & Procedure

The usual measure of monetary damages for violation of a covenant not to compete, even where the violator was paid a discreet sum for the covenant, is the amount that puts the injured party in the same position it would have been in if the contract had been performed.  Briggs v. GLA Water Management, 2014 Ohio 1551 (Ohio App., … Continue Reading

Illinois Federal Court Finds Only 15 Months’ Employment Sufficient Consideration For Non-Compete Agreement

Posted in Trade Secrets

In a ruling announced a few days ago, Chief Judge Ruben Castillo of the U.S. District Court for the Northern District of Illinois adjudicated the validity of a non-compete clause in an employment agreement where the employee had worked for only 15 months and then resigned and began competing. Notwithstanding the latest word from the Illinois Appellate Court — “Illinois … Continue Reading

Illinois Supreme Court Won’t Take Up Non-Compete Case, Adequate Consideration Questions Remain

Posted in Non-Compete Enforceability, Practice & Procedure

Once a stalwart of adequate consideration in exchange for a restrictive covenant, new employment, remains in flux after the Fifield v. Premier case was not taken up by the Illinois Supreme Court recently. 

Fifield, decided in the summer of 2013 by the First District Appellate Court, held that in order for employment to be adequate consideration for a non-compete, employment … 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

You’ve Already Signed Your Offer Letter– Can You Still Be Subject to a Non-Compete Agreement Signed at the Inception of Employment Without New Consideration? Pennsylvania Supreme Court Says Yes

Posted in Non-Compete Enforceability, Practice & Procedure

Is new consideration required for a valid covenant not to compete presented to an employee at the inception of their employment after they sign their offer letter? 

Under the majority approach, recognized in many states continued employment is sufficient consideration for a valid non-compete agreement.  However, a minority of jurisdictions, will not enforce a non-compete agreement offered for signature after … Continue Reading

Kentucky Appellate Court Affirms Authority of Kentucky Courts to Modify Overly Broad Non-Competition Agreements in the Employment Context and Sets Forth “Guiding Principles” for Future Non-Compete Cases

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

By Robert Milligan and Grace Chuchla

In a recent opinion, Creech, Inc. v. Brown, the Kentucky Court of Appeals both affirmed the ability of Kentucky courts to modify overly broad non-competition agreements in the employment context and laid out a six-part framework that trial courts may follow when analyzing the reasonableness and enforceability of non-competition agreements.

The court also … Continue Reading

A Business Entity That Changes Its Corporate Structure Risks Expiration Of Its Employees’ Covenants-Not-To-Compete And Confidentiality Agreements

Posted in Non-Compete Enforceability, Trade Secrets

A business entity changing its form, but not its operations, will want to protect non-competition and confidentiality agreements with its employees from expiring as a result of the transaction. Because those covenants usually are viewed as non-assignable personal service contracts, they may be unenforceable by the surviving entity, absent each employee’s express consent, if the covenants are seen as pertaining solely … Continue Reading

Texas Supreme Court Allows Stock Options as Consideration for Non-Compete Agreements

Posted in Non-Compete Enforceability

 

A recent decision by the Texas Supreme Court makes it easier for employers to enforce restrictive covenants in Texas. Employers often seek to obtain these types of contracts with key employees to prevent them from going to work for competitors or to leave to start competing businesses. The enforceability of such contracts is typically governed by state law, resulting in … Continue Reading