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

Tag Archives: Illinois

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

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

Illinois Appellate Court Rules That Employment For Less Than Two Years Is Inadequate Consideration For Enforcement Of Non-Compete And Non-Solicitation Covenants

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

Overview.  Non-compete and non-solicitation covenants in an employment agreement are not enforceable unless the restrictions are supported by adequate consideration.  Illinois courts have held that there “must be at least two years or more of continued employment to constitute adequate consideration in support of a restrictive covenant.”  No reported decisions from other states are in accord.

The covenants and the … Continue Reading

Illinois Passes Social Media Legislation To Regulate Flash Mobs

Posted in Legislation, Social Media

Think flash mobs are innocent fun?  Well if you’re in Illinois, proceed with caution.  The Illinois legislature recently passed a bill which provides tougher punishments for people whose social media posts result in flash mobs.  The bill was recently signed into law by Illinois Governor Pat Quinn.

The new law is intended to reduce violent events in Chicago, particularly the … Continue Reading

Illinois Appellate Court Partially Reverses Broad Non-Compete Injunction Against Physicians

Posted in Non-Compete Enforceability, Practice & Procedure

The First District of the Illinois Appellate Court, in the case of Northwest Podiatry Center, Ltd., et al. v. Ochwat, et al., recently found that a trial court improperly enjoined physician-defendants in a few key respects. The decision serves as a reminder of how courts will closely scrutinize restrictive covenants in Illinois.

The case was filed after two longtime … Continue Reading

No Damages? Illinois Federal Court Tosses Computer Fraud and Abuse Act Claim Alleging Hacking of Law Firm Network

Posted in Computer Fraud, Computer Fraud and Abuse Act

An Illinois federal court recently found in the favor of the defendant on a plaintiff’s Computer Fraud and Abuse Act claim because the plaintiff allegedly failed to satisfy the statute’s $5,000 damages threshold.

The plaintiff, a computer consulting servicing company which spent time restoring its client’s computer network (a Chicago law firm) after it was allegedly hacked by the plaintiff’s … Continue Reading

Illinois Federal Court Issues Preliminary Injunction Prohibiting Use Of Misappropriated Trade Secrets But Rejects Request For Expanded Injunction Based On Alleged “Inevitable Disclosure”

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

A recent Illinois trade secrets and non-compete decision involving a 3D printing salesman serves as a reminder that some Illinois courts will scrutinze overly broad non-compete provisions and may limit injunctive relief to the territory that the employee actually serviced for their former employer. Fisher/Unitech, Inc. v. Computer Aided Technology, Inc., Case No. 13 C 2090 (N.D.Ill., 4/9/13).

Preliminary injunction … Continue Reading

Illinois Legislator Proposes Unique Employment Noncompete Agreement Act

Posted in Legislation, Non-Compete Enforceability, Restrictive Covenants

Rep. Thomas Morrison, a Republican member of the Democratic-controlled Illinois General Assembly, has introduced HB 2782 (98th G.A.) – the “Employment Noncompete Agreement Act.” The bill would create a new Illinois statute, not simply an amendment to an existing one, that differs markedly from every current state non-compete statute. Rep. Morrison introduced the identical bill in the previous … Continue Reading

Chicago Breakfast Briefing: Protecting Your Most Valuable Assets – Trade Secrets, IP and Your Employees

Posted in Data Theft, Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Trade Secrets, Unfair Competition

Illinois and Federal laws have evolved significantly in recent years and as a result employers now have many tools available to protect themselves. Understanding these tools, as well as the impact of legal changes in this area, is necessary if a company intends on protecting its most valuable assets (i.e. trade secrets, IP and employees).

Please join us for an … Continue Reading

Proposed Social Media Legislation On California Governor’s Desk

Posted in Legislation, Practice & Procedure, Trade Secrets

By Jessica Mendelson and Grace Chuchla

On September 12, 2012, California Assembly Bill 1844 was enrolled and presented to Governor Brown. This bill is the counterpart to the Social Media Privacy Act (SB 1349), which was approved by the California State Senate in August 2012. AB 1844 is the work of Assemblywoman Nora Campos (D-San Jose), and seeks to prohibit … Continue Reading

Illinois Becomes Second State In Nation To Bar Employers From Obtaining Access To Employee Social Networking Pages

Posted in Computer Fraud, Legislation, Practice & Procedure, Trade Secrets

By Ronald Kramer

On August 1, 2012, Illinois became the second state in the nation to adopt a law prohibiting employers from seeking employee or prospective employee passwords to access their non-public portions of their social networking sites.

The Illinois’ law, an amendment to the Right to Privacy in the Workplace Act that will become effective January 1, 2013, makes … Continue Reading

Parties In High Profile Sports Agent Dispute In California Involving Trade Secret and Non-Compete Issues Throw Off The Gloves

Posted in Non-Compete Enforceability, Trade Secrets

The case of Mintz v. Mark Bartelstein & Associates d/b/a Priority Sports & Entertainment, recently filed in the Central District of California, provides an interesting look at both non-compete and trade secret law, as seen through the world of a sports agent.

Aaron Mintz, a National Basketball Players Association (NBPA) certified player-agent, allegedly resigned from Priority Sports & Entertainment on … Continue Reading

Colorado Federal Court Decision In Non-Compete Dispute Demonstrates Importance Of Drafting Enforceable Forum Selection Provisions In Business Transactions

Posted in Non-Compete Enforceability, Practice & Procedure

By Robert Milligan and Jeffrey Oh

As part of the process of acquiring of a business and retaining key employees of the acquired business, multiple agreements surrounding the parameters and contingencies of the transaction are often drafted, including asset purchase agreements and employment agreements. These agreements sometimes overlap in scope and ensuring that all material aspects of the deal align in … Continue Reading

Illinois Appellate Court Holds That Illinois Supreme Court Non-Compete Decision In Reliable Fire Applies Retroactively

Posted in Non-Compete Enforceability

By Jessica Mendelson

On February 3, 2012, the Appellate Court of Illinois, Second District reversed and remanded the Winnebago County Circuit Court’s decision in Hafferkamp v. Llorca in a significant unpublished non-compete decision. The Second District held that the trial court failed to properly apply the Illinois Supreme Court’s standard set in Reliable Fire Equipment v. Arredondo to determine whether … Continue Reading

Illinois Federal Court Strikes Down Online Company’s Forum Selection Provision Contained In Licensing Agreement In Consumer Data Collection Spat

Posted in Practice & Procedure

By Robert Milligan and Joshua Salinas

The best things in life are free, except for screensavers, games, and other software provided on-line that spy on your computer activity and gather your personal information, at least according to the consumer Plaintiffs in the recent data collection/privacy suit filed in Illinois federal court captioned Harris v. comScore, Inc., No. 11 C 5807, … Continue Reading

Plaintiff Receives Million Plus Attorneys’ Fees Award In Trade Secret Dispute Despite Small Damages Award

Posted in Trade Secrets

A recent trade secret misappropriation action resulted in an award of compensatory damages of $41,000 and punitive damages of $40,000. Then, the plaintiff asked for more than a million dollars in attorney’s fees and costs. The defendants protested that (a) the fee request was grossly disproportionate to the damages that were recovered, and (b) the plaintiff’s billing was excessive. However, … Continue Reading

Illinois House of Representatives Revisits Non-Compete Statute

Posted in Non-Compete Enforceability

We informed our readers on March 31, 2009 about Illinois House Bill 4040, titled "Illinois Covenants Not to Compete Act" (link). House Bill 4040 attempted to limit non-compete enforcement to employees or independent contractors who:… Continue Reading

have substantial involvement in the executive management of the employer’s business;
have direct and substantial contact with the employer’s customers;
possess knowledge of the

Illinois Appellate Court Says Legitimate Business Interest Not Necessary to Enforce a Covenant-Not-To-Compete

Posted in Non-Compete Enforceability

In a landmark decision just issued, the Illinois Appellate Court, Fourth District, ruled that an ex-employer seeking to enforce a covenant-not-to-compete against former sales personnel need only show that the time-and-territory restrictions are reasonable and need not prove, in addition, that there is a sufficient legitimate-business-interest in enforcement. 

In Sunbelt Rentals, Inc. v. Ehlers, No. 4-09-0290 (9/23/09), the appellate tribunal … Continue Reading

While Illinois Senate Considers Dramatic Alterations to Illinois Trade Secrets Act, Illinois House of Representatives Seeks to Enact Non-Competition Statute

Posted in Non-Compete Enforceability

As discussed in our March 9th  and 17th postings, Illinois Senate Bill SB 2149 seeks to dramatically alter the landscape of trade secret enforcement and litigation in Illinois by, among other things, (a) requiring disclosure of trade secrets before a party issues written or oral discovery; (b) awarding attorneys’ fees to the prevailing party in a trade secrets case; and … Continue Reading

Damage Assessment Not Enough: For Purposes of the CFAA, Apparently “Loss” Does Mean “Damage”

Posted in Computer Fraud and Abuse Act

 

BY JASON STIEHL

            In recent years, courts in the Northern District of Illinois have made clear that without actual harm to data, a plaintiff cannot claim “damage” under the Consumer Fraud and Abuse Act, 18 U.S.C. 1030 et seq. (“CFAA”). See, e.g., Garelli Wong & Assoc. v. Nichols, 551 F. Supp. 2d 704, 704 (N.D. Ill. 2008) (holding there was no … Continue Reading

Proposed Changes to Illinois Trade Secrets Act Pass Through Senate Judiciary Committee — Full Senate Vote Expected Within Weeks

Posted in Trade Secrets

As discussed in our March 9th posting, Illinois Senate bill SB 2149 seeks to alter the landscape of trade secret enforcement and litigation in Illinois by, among other things, a) requiring disclosure of trade secrets before a party issues written or oral discovery; b) requiring attorneys’  fees be awarded to the prevailing party in a trade secrets case; and c) … Continue Reading

ILLINOIS GENERAL ASSEMBLY CONSIDERING DRAMATIC CHANGES TO TRADE SECRETS ACT – INCLUDING MANDATORY ATTORNEYS’ FEES

Posted in Trade Secrets

A new bill recently introduced in the Illinois State Senate would dramatically change the Illinois Trade Secrets Act (765 ILCS 1065/1 et at.) and alter the landscape of trade secret litigation in Illinois. The bill, SB 2149, requires a party asserting trade secret misappropriation to serve on the opposing party, before commencing any written or oral discovery, a written statement … Continue Reading

“Say Cheese, you’re Enjoined!”: Southern District of Illinois Enters Preliminary Injunction against Husband-Wife Team in the School Photo Industry

Posted in Restrictive Covenants

In Hal Wagner Studios, Inc. v. Elliott, No. 3:09-CV-31-MJR, 2009 WL 424432 (S.D. Ill. Feb. 19, 2009), Judge Michael Reagan of the Southern District of Illinois entered a preliminary injunction against Kris Elliott (Wagner’s former general manager for its Edwardsville, Illinois office) and a number of former Wagner employees, including Elliott’s wife, Pam. The facts of the case are as follows:… Continue Reading