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

Tag Archives: non-compete

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

Federal Court in Alabama Rules That Non-Compete Signed Prior to Employment is Void

Posted in Non-Compete Enforceability, Restrictive Covenants

By Bob Stevens and Dan Hart

For many in Alabama, the holiday season does not end until after the college football national championship game, which has featured one of the state’s two top college football programs (the Auburn University Tigers and the University of Alabama Crimson Tide) for each of the five past years. While not quite as exciting as … Continue Reading

Georgia Federal Court Disregards Forum Selection Clause In Non-Compete And Non-Solicitation Covenant Dispute

Posted in Non-Compete Enforceability, Restrictive Covenants

Notwithstanding a forum-selection provision in the parties’ consulting agreement designating the Northern District of Georgia as the place for litigating non-competition and non-solicitation covenants disputes, a Georgia federal judge transferred covenant violation litigation to the Middle District of Florida. Also, the judge explained why he thought that an arbitration clause was unenforceable, but he said that the Florida court should … Continue Reading

Nosal Update: Court Denies Motion for Acquittal and New Trial in Marathon CFAA and Trade Secret Misappropriation Criminal Case – Part II

Posted in Computer Fraud and Abuse Act, Data Theft, Espionage, Restrictive Covenants, Trade Secrets

In Part I of this post, we reviewed the Court’s ruling on Nosal’s conviction on the CFAA counts. Here in Part II, we turn to the Court’s ruling on the EEA counts, and the exclusion of evidence regarding Nosal’s non-compete provision.

B.    Nosal’s Conviction on the EEA Counts:

Nosal was convicted of two counts under the EEA for downloading, copying … 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

California Style Non-Compete Legislation Introduced In Minnesota

Posted in Legislation, Non-Compete Enforceability

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 Johnson (DFL-St. Paul).  The … Continue Reading

New York Federal Court Denies Injunction to Enforce Restrictive Covenants Against Terminated Employee

Posted in Non-Compete Enforceability

Garrod, 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 appeared reasonable on their face–and … Continue Reading

Massachusetts Legislators Introduce “Noncompete Agreement Duration Act”

Posted in Legislation

By 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 few other states and banned … 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 Covenants

On 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 on October 1, 2013, and … Continue Reading

Speculative Fears Insufficient for Non-Compete Temporary Restraining Order Against Former Employee

Posted in Non-Compete Enforceability, Restrictive Covenants

While 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 Covenants

A 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 the potential harm to the … 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 Covenants

In 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 of which concern similar … 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 Covenants

If 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 soliciting her former employer’s clients. … 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 Secrets

By 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 and … 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 Covenants

Early 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 with Colin O’Keefe … 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

Trade Secrets and Non-Compete Legislative Update Webinar On September 20, 2012

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

Please 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 additional jurisdictions. As trade secrets … 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 Secrets

By 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. 

In Fillpoint v. Maas, 2012 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 Covenants

Travelhost, 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 of Texas for alleged violations … 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 & Procedure

On 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 in Reno, Nevada starting … Continue Reading

Delaware Chancery Court Rules That Former Employees Are Not Indispensable Parties in Non-Compete Case

Posted in Non-Compete Enforceability, Practice & Procedure

On 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 on allegations that the new … 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

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 Covenants

By 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, 2012. Under the new … Continue Reading