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
In Illinois federal court, a plaintiff alleged aspects of their LinkedIn group were trade secrets misappropriated by the defendant. The defendant moved to dismiss for failure to state a claim. The court denied the motion in part and granted in part, ruling that portions of social media groups may be protectable under the state’s trade secret law. CDM Media USA, … Continue Reading
A Chicago federal judge denied summary judgment to an employer alleged to have misappropriated and converted a subordinate’s trade secrets. Stevens v. Interactive Financial Advisors, Inc., Case No. 11 C 2223 (N.D. Ill., Feb. 24, 2015) (Kennelly, J.).
Summary of the case. After 20 years as a licensed insurance broker, Stevens wanted to provide investment advisory services as well. … Continue Reading
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
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
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.
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
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 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
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
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
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
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
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
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
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
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
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
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
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
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: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… Continue Reading
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 … Continue Reading
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
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) … Continue Reading