New proposed legislation introduced in the Minnesota House of Representatives would invalidate effectively all employee non-compete agreements if passed. On February 11, 2013, Democratic-Farmer-Labor party members Joe Atkins and Alice Hausman introduced H.F. No. 506. The bill was read and referred to the Committee on Labor, Workplace and Regulated Industries, a committee chaired by Rep. Sheldon… Continue Reading
Tag Archives: non-compete
New York Federal Court Denies Injunction to Enforce Restrictive Covenants Against Terminated Employee
Posted in Non-Compete EnforceabilityGarrod, a salesman for more than 25 years in the field of elastomeric precision products (EPP), was terminated in mid-2012 after spending an aggregate of a dozen of those years working for manufacturers of EPP parts Fenner and a company acquired by Fenner. He had signed both employers’ agreements containing non-compete and customer non-solicitation clauses–which… Continue Reading
Massachusetts Legislators Introduce “Noncompete Agreement Duration Act”
Posted in LegislationBy Erik Weibust and Ryan Malloy Massachusetts has entered a new chapter in a long-standing effort to enact comprehensive non-compete reform in the Commonwealth. Recall from these previous posts that Senator Will Brownsberger and Representative Lori Ehrlich each introduced competing non-compete legislation in 2008 — Brownsberger’s would have gone the way of California and a… Continue Reading
To Work or Not to Work – Maryland’s Senate Considers Changes To Non-Compete Law for Those on Unemployment
Posted in Legislation, Non-Compete Enforceability, Practice & Procedure, Restrictive CovenantsOn January 9th, the Maryland Senate introduced a bill which if passed would invalidate employee “noncompetition covenants” for former workers who applied for and obtained unemployment benefits. Senate Bill 51 is sponsored by Senator Ronald N. Young, Democrat, who just began his third year in the Maryland Senate. If enacted, the bill will take effect… Continue Reading
Speculative Fears Insufficient for Non-Compete Temporary Restraining Order Against Former Employee
Posted in Non-Compete Enforceability, Restrictive CovenantsWhile treats are in abundance on Halloween, a Minnesota employer recently received a trick when a federal court denied its temporary restraining order application. A Minnesota federal court held that an ex-employer’s apprehension that a former employee violated or would violate a non-compete and confidentiality agreement was entirely speculative and, thus, did not warrant a TRO. Sempris, LLC v. Watson,… Continue Reading
Paramedics Defeat Noncompete and Customer Nonsolicit Preliminary Injunction on Grounds of Potential Harm to Public and Paramedics
Posted in Non-Compete Enforceability, Restrictive CovenantsA private medical transport service was recently unsuccessful in persuading the U.S. District Court for the Northern Mariana Islands to enter a preliminary injunction prohibiting two ex-employees from competing with and soliciting customers of their former employer. The judge cited Section 188 of the Restatement of Contracts (Second) as authority for denying injunctive relief where… Continue Reading
Are Non-Competition And Non-Solicitation Provisions In An Employment Agreement Enforceable Despite The Absence Of Compensable Damages?
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive CovenantsIn a recent ruling, a West Virginia federal judge held that litigation involving a former employee’s claimed violation of covenants not to compete and not to solicit the ex-employer’s workers must proceed to trial even though the ex-employer produced no evidence of monetary loss. Relying on 76-year old and 118-year old West Virginia cases neither… Continue Reading
Ignorance Isn’t Always Bliss: What to Do When Your Job Candidate Isn’t Sure if She Is Bound By A Non-Compete
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive CovenantsIf you’re an employer in an industry where non-compete agreements are common, perhaps you’ve been faced with the following scenario: You offer a sales position to a candidate who tells you she doesn’t think she has a non-compete with her employer, which is a competitor of yours. Once she’s onboard at your company, she begins… Continue Reading
California Federal Court Boots Employee’s Challenge Of His Non-Compete Because Of Pennsylvania Forum Selection Provision
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Trade SecretsBy Robert Milligan and Grace Chuchla In a recent order, a federal court in the Northern District of California weighed in on the validity a forum selection clause contained in an employment agreement in connection with a California employee’s declaratory relief action to invalidate his non-compete provision with his former employer. The court found for the Pennsylvania-based employer… Continue Reading
Video Interview: California Appellate Court Rules Non-Compete In Key Employee Agreement Unenforceable Despite “Sale of Business” Exception
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive CovenantsEarly last week, we wrote a post on a unique circumstance in which a non-compete agreement was ruled unenforceable by the California Court of Appeal despite the fact that it was executed pursuant to the sale of a business. (Fillpoint, LLC v. Maas (August 24, 2012)). Following up on that post, I had the chance to speak… 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 CovenantsBy 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… Continue Reading
Trade Secrets and Non-Compete Legislative Update Webinar On September 20, 2012
Posted in Legislation, Non-Compete Enforceability, Practice & Procedure, Trade SecretsPlease join us for our sixth trade secrets webinar of the year entitled Trade Secrets and Non-Compete Legislative Update. The webinar will be September 20, 2012 from noon to 1:00 p.m. central. The past year has seen significant statutory changes to several jurisdictions’ laws regarding trade secrets and restrictive covenants and pending legislation proposed in… Continue Reading
California Court Of Appeal Finds That Non-Competition Agreement Contained In Employment Agreement Is Unenforceable Against Former Seller/Employee Even Though It Was Executed In Connection With The Sale Of A Business
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Trade SecretsBy Robert Milligan and Joshua Salinas Non-competition agreements executed in connection with the sale of a business are typically enforceable as a limited exception under Business and Professions Code section 16601 and applicable case authority to California’s general prohibition against non-competition agreements. A recent California Court of Appeal decision, however, further narrows this limited exception. … Continue Reading
Texas Federal Courts Reach Differing Conclusions On Granting Injunctive Relief On Close To Expiring Or Expired Non-Competes: Some Courts Elect To Equitably Extend Covenants
Posted in Non-Compete Enforceability, Practice & Procedure, Restrictive CovenantsTravelhost, Inc., produces magazines and other publications designed to help travelers. Over the course of the last several years, a number of employees, each of whom had signed a non-compete agreement, left the company and began working for its competitors. Travelhost sued several of the ex-employees in the U.S. District Court for the Northern District… Continue Reading
Nevada Attorney General and FTC Scrutinize Nevada Healthcare Company’s Alleged Anti-Competitive Behavior Concerning Use of Non-Compete Agreements
Posted in Non-Compete Enforceability, Practice & ProcedureOn August 6, the Nevada Attorney General announced the filing of a lawsuit and settlement against Renown Health (“Renown”), a Reno, Nevada based company, alleging violations of state and federal antitrust law. At the same time, the Federal Trade Commission filed a complaint, also alleging anti-competitive behavior. Renown had recently acquired two of largest cardiology practices… Continue Reading
Delaware Chancery Court Rules That Former Employees Are Not Indispensable Parties in Non-Compete Case
Posted in Non-Compete Enforceability, Practice & ProcedureOn July 11, 2012, the Delaware Court of Chancery found that former employees are not indispensable parties for purposes of dismissal pursuant to Chancery Court Rule 19 in an action against their new employer for breach of covenants not to compete, misappropriation of trade secrets, and aiding and abetting a breach of fiduciary duty, based… 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 SecretsA 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… Continue Reading
New Hampshire Enacts New Law Requiring Disclosure of Non-Compete and Non-Piracy Agreements Prior To Job Offer And Change In Job Classification
Posted in Non-Compete Enforceability, Restrictive CovenantsBy Ryan Malloy and Robert Milligan The New Hampshire legislature recently passed a new state law that will require the disclosure of non-compete and non-piracy agreements to potential employees prior to making offers of new employment and to existing employees with an offer of change in job classification. Governor Lynch signed the bill on May 15,… 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 SecretsThe 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… 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 & ProcedureBy 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… Continue Reading
For Whom the Employment Agreement Tolls: New York State Appellate Court Applies Equitable Tolling Doctrine In Non-Compete Dispute
Posted in Non-Compete Enforceability, Practice & ProcedureAn important procedural issue that often arises in a non-compete dispute is the idea of equitable tolling. This doctrine essentially allows a court to toll, or stay, the time remaining on a non-compete agreement during the period in which the employee is in breach. Equitable tolling, however, is not always available, and the remedy is… Continue Reading
California Federal Court Ships California Employee’s Declaratory Relief Action Seeking To Invalidate His Non-Compete To Pennsylvania
Posted in Non-Compete EnforceabilityOn February 27, 2012, a California federal judge for the Northern District of California, decided the case of Hegwer v. American Hearing and Associates, finding that the alleged illegality of a non-compete clause in an employment agreement involving a California employee has no bearing on a legal forum selection clause. Accordingly, the Court transferred the employee’s declaratory relief action… Continue Reading
Massachusetts Court Finds IT Consultant’s Non-Compete Agreement Unenforceable Due to “Material Change” in Employment Relationship
Posted in Non-Compete EnforceabilityBy Kate Perrelli, Erik Weibust, and Ryan Malloy In Grace Hunt IT Solutions, LLC v. SIS Software, LLC, et al., Judge Lauriat of the Business Litigation Session of the Massachusetts Superior Court recently held that an IT consulting firm could not enforce non-compete agreements against employees who left after the company decreased their base salaries and implemented… Continue Reading
A New York Court Holds that Employee Choice Doctrine Does Not Apply to Equitable Relief in a Non-Compete Matter
Posted in Non-Compete EnforceabilityEmployers often condition the payment of post-employment or deferred compensation on a departing employee’s compliance with a noncompete agreement. New York is one of the few states that specifically allow for such an arrangement under the "employee choice" doctrine. This doctrine holds that an employee who chooses to voluntarily resign and violate his or her… Continue Reading