In a landmark ruling of first impression, the Pennsylvania Supreme Court recently held that an employer’s non-competition covenant, which included the employee’s pledge not to challenge the covenant for inadequate consideration, is unenforceable unless it is accompanied by a change in job status or some other significant benefit. Socko v. Mid-Atlantic Systems of CPA, Inc., Case No. 3-40-2015 (Nov. 18, … Continue Reading
A non-competition covenant prohibited employees of Adhesives Research (AR), a company based in Pennsylvania, from performing services for a competitor of AR anywhere in the world for two years after termination. Newsom, AR’s western U.S. manager of medical products, worked out of her home in California. When she quit and joined another adhesives manufacturer, AR sued and moved for entry … Continue Reading
A Florida franchisee executed a franchise agreement (FA) containing a non-compete provision and a Pennsylvania forum selection clause. Following termination of the FA, the former franchisee’s wife opened a similar business in another part of Florida. The franchisor filed suit in Pennsylvania against the former franchisee and his wife, and they moved to dismiss or, alternatively, to transfer the case … Continue Reading
A state court issued a preliminary injunction for alleged trade secret misappropriation, but the enjoined parties successfully used post-injunction discovery to convince the court that the complaint was baseless. Those parties then filed a federal court lawsuit for abuse of process and other torts. In Peek v. Whittaker, Case No. 2:13-cv-01188 (W.D. Pa., May 22, 2014), the court held … Continue Reading
Dating comes with its own set of challenges, and apparently, these now include trade secrets! This month, a speed dating service provider, Speed Date USA Inc. (“Speed Date”) filed a multi-million dollar lawsuit against Match.com (“Match”) in Pennsylvania federal court.
According to the allegations in a recently filed complaint, Defendant Implementation Management Assistance, Inc. (“IMA”) hired a long-time employee, Liana Hans, away from competitor Plaintiff Triage Consulting Group, Inc. (“Triage”). Hans allegedly had intimate knowledge of Triage’s proprietary systems and allegedly shared that knowledge with IMA, in derogation of her confidentiality agreement with Triage. IMA thereafter recruited another Triage employee, … Continue Reading
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
On May 17, 2013, a Pennsylvania appellate court, with one of its judges dissenting, ordered that the trial court award attorneys’ fees to a married couple whose neighbors wrongfully accused them of trade secret misappropriation regarding flagstone artwork. Krafft v. Downey, Pa. Sup. Ct. No. 476 WDA 2012 (Donohue, J.).
According to the majority, plaintiffs Jack and Linda Krafft … Continue Reading
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
Pursuant to the “Gist of the Action” doctrine, tort claims may be dismissed if they are “intertwined with,” and not just “collateral to,” contract claims in the same complaint.
In a Pennsylvania federal court case, an ex-employee was accused by his former employer of breaches of confidentiality, non-solicitation and non-compete agreements, and related causes of action. The portion of the … Continue Reading
Ownership of company social media accounts has recently become a hot topic in the legal industry, and with its decision in Eagle v. Morgan, 2012 WL 4739436, E.D.Pa., October 04, 2012 (NO. CIV.A. 11-4303) this past week, the Eastern District of Pennsylvania has added fuel to the fire.
Edcomm, a banking education company, was … Continue Reading
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
On 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 to Pennsylvania federal court.
Plaintiff … Continue Reading
In the most recent ruling in long-running litigation styled AMG National Trust Bank v. Ries, NO. 06-CV4337, 09-cv-3061 (E.D. Pa.) (decided Dec. 29, 2011), the Eastern District of Pennsylvania partially granted the defendant Stephen Ries’s motion for summary judgment, jettisoning the plaintiff’s breach of fiduciary duty claims and plaintiff’s request for liquidated damages, but permitting the case … Continue Reading
By Justin Beyer
In a matter of first impression, Judge William Standish of the Western District of Pennsylvania ruled in Best Medical Int’l, Inc. v. Spellman, 07-cv-01709-WLS, 2011 U.S. Dist. LEXIS 147853 (W.D. Pa. Dec. 22, 2011), that, pursuant to the Pennsylvania Uniform Trade Secrets Act (“PUTSA”), a defendant may recover attorneys’ fees against a plaintiff where the plaintiff … Continue Reading
In the age of social media and networking, where employees undoubtedly use their company-issued computers to network with customers, vendors, colleagues, and friends, a legal question presents itself: can employers claim an interest in their employees’ LinkedIn accounts, or other social networking accounts, which the employees use in part to grow and maintain their relationships for the … Continue Reading
Once triggered by a debtor’s bankruptcy petition, the automatic stay suspends a parties’ right to commence or continue an action against property of the debtor’s estate. In general, a party can seek relief from the automatic stay for a variety of reasons, including for cause, lack of adequate protection or that the debtor has no equity in the property and … Continue Reading
A federal court recently entered a TRO to prevent disclosure of trade secrets justifiably shared, in confidence, with business associates. When two of those associates made plans, clandestinely, to form a competing company, they were enjoined from disclosing the trade secrets even though they had not signed a confidentiality agreement. Exl Labs., LLC v. Egolf, 2010 U.S. Dist. LEXIS 131105 (E.D. Pa., … Continue Reading
On July 27, the United States Court of Appeals for the Third Circuit affirmed a district court’s order enjoining a senior executive from Bimbo Bakeries USA, Inc., from working for one of Bimbo’s competitors, Hostess, until after the district court resolved the merits of Bimbo’s misappropriation of trade secrets claim against the executive. Among other trade secrets at issue in … Continue Reading
When explaining to lay people what we do, trade secret practitioners often use the classic examples of the formula for Coca-Cola or KFC’s secret recipe of eleven herbs and spices. Now, we can add as an illustration the nooks and crannies of Thomas’ English Muffins, as demonstrated by a case filed by Bimbo Bakeries (“BBakeries”) in the Eastern District of Pennsylvania. BBakeries, … Continue Reading
Because the laws of various states regarding non-compete clauses differ significantly, cases involving these provisions often entail fights at the outset as to the proper venue. The Eastern District of Pennsylvania recently faced just such an issue in CertainTeed Corp. v. Nichiha USA, Inc., Civil Case No. 09-CV-3932-LS, 2009 WL 3540796 (E.D. Pa. Oct. 29, 2009). In that matter, CertainTeed contested with … Continue Reading