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Tag Archives: non-solicit

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 …

New Ninth Circuit Case Aids Departing Employees In Non-Compete and Non-Solicit Disputes Involving Race To Judgment

Posted in Non-Compete Enforceability

Contractual choice of law provisions often seek to apply the law of the state that, when applied by a court to the contract at issue, is most likely to result in favorable interpretations, application, and/or enforcement of those provisions in the contract most valued by the contracting parties. However, when the law chosen is of a state different than the …

Georgia Court Blue Pencils / Rewrites Overbroad Restrictive Covenant

Posted in Non-Compete Enforceability

By Bob Stevensand Daniel Hart

As we have discussed on this blog before, on May 11, 2011, Georgia reissued its new Restrictive Covenant Act (the “New Act”). The New Act reflected a fundamental change in Georgia’s law regarding restrictive covenants because it permitted Georgia courts to “blue pencil” (i.e., partially enforce) restrictive covenants that otherwise would be overbroad and, …

Indiana Court Upholds A Covenant Not To Solicit Recent Customers, But Prohibitions Against Contact or Accepting Referrals With Such Customers Are Stricken

Posted in Non-Compete Enforceability

A recent Indiana Court of Appeals opinion, designated as non-precedential, discussed that state’s law concerning non-competition agreements. Most significant, the court upheld a commitment not to solicit the employer’s current or recent customers for two years even though the covenant contains no geographical limitation. However, provisions precluding any “contact with” such customers, and forbidding acceptance of “referrals of” them, were “blue penciled.” The …

Now or Later? Debate Emerges Regarding Effective Date of Recent Georgia Constitutional Amendment

Posted in Non-Compete Enforceability

The question has been raised:  What is the effective date of Georgia’s new non-compete statute, O.C.G.A. § 13-8-50 et seq.?

The statute provides that it goes into effect on the day after the passage of an enabling Constitutional amendment. 

This Act shall become effective on the day following the ratification at the time of the 2010 general election of an amendment to …

“Circumstantial” Proof of Solicitation Found Insufficient by District of New Jersey

Posted in Restrictive Covenants

ING Life Ins. and Annuity Co. v. Gitterman, Slip Copy, 2010 WL 3283526 (DNJ August 18, 2010)

Plaintiffs ING Life Insurance and Annuity Company (“ILIAC”) and ING Financial Advisors (“IFA”) (collectively, “Plaintiffs” or “ING”), sought to enjoin defendants, all of whom were former employees of ING, from soliciting clients to withdraw certain accounts from ING, pending the resolution of a …

Breach of Contract Claim May Succeed Where a Misappropriation Claim Fails

Posted in Trade Secrets

The U.S. Court of Appeals for the Tenth Circuit recently held that a former employer’s price quotations to prospective customers were not trade secrets under Oklahoma law because they did not contain a confidentiality provision, but the former employee who took advantage of those quotations on behalf of his new employer did violate his non-compete covenant.  Southwest Stainless, LP v.

District Court Denies Request for Injunctive Relief in Financial Services Industry Dispute

Posted in Unfair Competition

In Smith Barney, Inc. v. Darling, No. 09-C-540, 2009 WL 1544756 (E.D. Wis. Jun. 3, 2009), the United States District Court for the Eastern District of Wisconsin denied Smith Barney’s request for temporary injunctive relief in aid of arbitration against five departing financial consultants and their new employer. Smith Barney sought an injunction to: (1) require the former employees to return …

Ohio Appellate Court Upholds Entry of Temporary Injunction

Posted in Breach of Fiduciary Duty

The Ohio 12th District Court of Appeals recently uphelda lower court’s injunction against two former employees and their new employer in light of defendants’ apparent breach of duty of loyalty, misappropriation of trade secrets, and tortious interference with business relations. DK Prods., Inc. v. Miller, Case No. CA2008-05-060, 2009 WL 243089 (Ohio Ct. App. 12 Dist. Feb. 2, 2009)

System …

Georgia House & Senate Committees Meet to Consider Restrictive Covenants in the Commercial Arena

Posted in Restrictive Covenants

This morning (September 24, 2008), Rep. Kevin Levitas and Sen. Judson Hill from the Georgia Legislature convened the first meeting of a legislative study committee reviewing the law of Georgia with respect to restrictive covenants in employment and business relationships. The House Committee is chaired by Representative Kevin Levitas, and includes the following members: Representative Tim Bearden; Representative Butch Parrish; Representative Richard …

California Appeals Court Upholds 5-Year, Statewide Non-Competition Covenant Contained In Agreement To Purchase Business

Posted in Restrictive Covenants

Alliant Insurance Services, Inc. v. Gaddy, No. C055192, 2008 WL 331065 (Cal. App. 3 Dist., Feb. 07, 2008)

On February 7, 2008, the California Court of Appeals affirmed a preliminary injunction, enjoining defendant G. Scott Gaddy from competing against his former employer, Alliant Insurance Services, Inc., within the entire state of California. The appellate court also upheld a non-solicitation provision …

Parsing Non-Competition Clause, Georgia Court of Appeals Uncovers Unreasonable & Overbroad Restriction

Posted in Restrictive Covenants

Trujillo v. Great Southern Equipment Sales, LLC, No. A08A0245, 2008 WL 269606 (Ga. Ct. App. Feb. 1, 2008).

Reviewing the “Confidentiality and Restrictive Covenant Agreement” signed by Sarah Alexandra Trujillo while employed by Great Southern Equipment Sales, LLC, the Georgia Court of Appeals reversed the part of the trial court’s judgment that enjoined Ms. Trujillo from competing with Great Southern …

Magistrate Judge Denies Motion for Reconsideration in Trade Secrets Case

Posted in Restrictive Covenants

National Elevator Cab & Door Corp. v. H & B, Inc., 2008 WL 207843 (E.D.N.Y.) No. 07 CV 1562

 

United States Magistrate Judge Levy recently denied a motion for reconsideration after he granted the plaintiff National Elevator Cab & Door Corp.’s motion for a preliminary injunction against defendant H & B, Inc. The litigation stems from the failed acquisition …

Illinois Appellate Court Warns Against Blue Penciling “Blatantly Unreasonable” Restrictive Covenants

Posted in Restrictive Covenants

On December 7, 2007, the Illinois First District Appellate Court in Cambridge Engineering, Inc. (“Cambridge”) v. Mercury Partners 90 BI, Inc., No. 1-06-0758 (1st District Appellate Court of Illinois, Sixth Division) determined that Cambridge’s non-solicitation and non-competition provisions were overly broad and unenforceable because the provisions prevented former Cambridge employees from (a) taking any job, “even that of a janitor,” …

Wisconsin Court Invalidates Non-Compete and Non-Solicitation Contracts Lacking Fized and Definite Duration

Posted in Restrictive Covenants

A half-dozen H&R Block employees in LaCrosse, Wisconsin, who had worked for the company for periods ranging from 10-25 years, left and within a few months began competing with their ex-employer. Each of the former employees had signed non-compete and non-solicitation covenants reciting that they lasted for a two-year period, but “such period to be extended by any period(s) of …

Recent Developments in California Trade Secrets Law

Posted in Restrictive Covenants, Trade Secrets

A California appellate court held in a recent decision that a broad “no-hire” provision contained in a consulting agreement was unenforceable as a matter of law because it was an impermissible restraint on trade in violation of the California Business and Professions Code Section 16600.

Despite the frequent use of “no-hire” and “non-solicitation” provisions in consultant and employment agreements, the …

North Carolina Court of Appeals Clarifies “In Any Capacity” Restriction

Posted in Restrictive Covenants

In Kinesis Advertising, Inc. v. Hill, 652 S.E.2d 284 (N.C. Ct. App. 2007), the North Carolina Court of Appeals reversed the trial court’s grant of summary judgment and touched on two important issues under North Carolina law. Kinesis filed the action, attempting to enforce non-compete and non-solicitation provisions against its former employees, Larry Hill and Dan Robinette, as well as …

The Importance of Including Non-Solicitation Clauses in Tandem With Non-Competes: Silipos, Inc. v. Bickel, 2006 WL 2265055 (S.D.N.Y. 2006)

Posted in Restrictive Covenants

The District Court for the Southern District of New York recently demonstrated the importance of including nonsolicitation language in employment agreements, in addition to noncompetition language, where employers seek to protect their customer base from departing employees. In Silipos, the court, despite finding that the noncompetition covenant in the subject agreement was not enforceable, nevertheless found that the nonsolicitation covenant …

Ex-Employee’s Knowledge of Method that Former Employer Used in Calculating Bulk Product Quotes Leads Illinois Appellate Court to Enforce 24-Month Non-Competition and Non-Solicitation Agreements

Posted in Restrictive Covenants

An Illinois Appellate Court recently affirmed a preliminary injunction granted to a medical products manufacturer against its former employee, enforcing 24-months’ non-competition and non-solicitation agreements. The non-competition agreement barred the defendant-employee from competing with the plaintiff with respect to all products and territory assigned to the defendant during his final 18 months of employment. The non-solicitation agreement prohibited the defendant …

Do Employers Need to Give Employees Consideration for Non-Competes in Georgia?

Posted in Restrictive Covenants

Clients often ask whether they need to provide any consideration to their existing employees when they ask their employees to sign non-compete or non-solicitation agreements. The answer in Georgia typically is that continued employment is sufficient consideration for such an agreement. (The answer is different in Texas and North Carolina, for example.) Glisson v. Global Security Services, LLC, Georgia Court …

Georgia Court of Appeals Narrowly Construes Non-Solicitation Provision

Posted in Restrictive Covenants, Trade Secrets

It appears that the Georgia Court of Appeals narrowly interpreted the phrase “on behalf of” in a non-solicitation clause to prevent application of a non-solicitation provision to support a breach of contract claim. Although the parties did not dispute that the Clause applied to clients who transacted business with the plaintiff, Atlantic Insurance Brokers LLC (“AIB”), and dealt with the …