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

Tag Archives: restrictive covenants

Once You’ve Made Your Restrictive Covenant Bed You Must Lie Upon It…

Posted in International, Non-Compete Enforceability, Restrictive Covenants, Trade Secrets

The traditional approach taken by the English Courts to restrictive covenants was confirmed in the decision of the Court of Appeal in Prophet plc v Huggett [2014] EWCA Civ 1013. The Court of Appeal overturned a High Court judge’s decision that the words “or similar thereto” should be added to the relevant clause in order for it to make … 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

Chicago Breakfast Briefing: Protecting Your Most Valuable Assets – Trade Secrets, IP and Your Employees

Posted in Data Theft, Non-Compete Enforceability, Practice & Procedure, Restrictive Covenants, Trade Secrets, Unfair Competition

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

California Supreme Court To Announce Significant Trade Secret/Non-Compete Decision Tomorrow In Edwards v. Arthur Andersen

Posted in Restrictive Covenants, Trade Secrets

           According to the California Supreme Court’s website, the Court’s highly anticipated decision in Edwards v. Arthur Andersen, LLP will be available tomorrow, August 7, 2008 at 10:00 a.m. on the Court’s website.

            Trade secret and employment attorneys have been closely following the Edwards case after the Supreme Court granted review of the case on November 29, 2006. … Continue Reading

California Court Finds That Contract Provision Requiring Departing Police Officer To Reimburse City For Training Expenses Does Not Violate Business and Professions Code Section 16600.

Posted in Restrictive Covenants

By Robert Milligan and Summer Associate Justin de Herrera

In City of Oakland v. Hassey, 163 Cal.App.4th 1477, (June 17, 2008), a California appellate court recently rejected a police officer’s claim that a provision in his employment contract requiring him to reimburse the City of Oakland for his training expenses constituted an illegal covenant not to compete in violation of … Continue Reading

Federal Court Structures Injunction to Allow Employee-Defendant to Continue to Receive Pay from New Employer

Posted in Restrictive Covenants

Zimmer, Inc. v. Albring, 2008 WL 2604969 (E.D. Mich.June 27, 2008)

Judge Steeh in the Eastern District of Michigan carefully crafted a narrowly tailored injunction order to prevent a former employee (Albring) from violating her non-compete and non-solicit agreements, but allowed her to remain employed by her new employer, and to be paid by that employer, pending the … Continue Reading

Primetech v. Cohen: No Duty Of Loyalty To Past Employers

Posted in Restrictive Covenants

The California Courts of Appeal recently concluded that a former employee could not have breached a duty of loyalty to his employer where he entered into competition with the employer only after leaving the company. Primetech Corp. v. Cohen, 2008 WL 1899976 (Cal. App. 4 Dist. April 30, 2008).

The plaintiff, Primetech Corporation, a supplier of aircraft parts to the … Continue Reading

Florida Case Underscores the Expense and Difficulty in Enforcement of Non-Compete Clauses Against Employees

Posted in Restrictive Covenants

By Scott Krol, New York

A six-panelist jury awarded $6.9 million in punitive damages and $126,511 in compensatory damages to CBS Radio f/k/a Infinity Radio in a dispute stemming from an action to enforce a non-compete clause against radio host Jennifer Ross, whose real name is Elena Whitby. According to published reports, CBS has spent approximately $4 million in attorney … Continue Reading

Eleventh Circuit affirms district court’s injunctive remedy on non-competition agreement. MQ Associates, Inc. v. North Bay Imaging, LLC, 2008 WL 713688 (11th Cir. March 18, 2008)

Posted in Restrictive Covenants

The Eleventh Circuit recently affirmed the enforcement of a non-competition agreement against a former employee where the plaintiff-company appealed from judgment entered in its favor because it was dissatisfied with the result. See MQ Associates, Inc. v. North Bay Imaging, LLC, 2008 WL 713688 (11th Cir. March 18, 2008).

Plaintiff MQ Associates (“MedQuest”) operates outpatient medical imaging clinics, providing services … Continue Reading

Illinois Appellate Court Holds That “Fundamental Public Policy” and Lack of Consideration Doom Employment Agreement Restrictive Covenant

Posted in Restrictive Covenants

In a 2-1 decision, the Illinois Appellate Court, Third District, affirmed summary judgment awarded to an ex-employee in an action brought by the ex-employer to enforce an employment agreement restrictive covenant. Brown & Brown, Inc. v. Mudron, No. 3-06-0908 (Ill. App., 3d Dist., Mar. 11, 2008). The agreement provided that it was to be construed in accordance with Florida law … Continue Reading

Extension of Protection Clause For Distributor Upheld After Termination For Violation of Noncompetition Agreement:Navair v. IFR Americas, __ F.3d __, 2008 WL 697381 (10th Cir. March 17, 2008)

Posted in Restrictive Covenants

In Navair v. IFR Americas, the Tenth Circuit reversed the district court’s grant of summary judgment to defendants, holding that an extension of time to a distribution agreement should be for a reasonable time even if no specific term is agreed upon by the parties.

Plaintiff Navair, Inc. was the exclusive Canadian distributor for IFR, a military communications equipment manufacturer. … Continue Reading

Former Employer’s Suggestion To Customers To Refrain From Doing Business With Alleged Misappropriator Not Actionable As Defamation

Posted in Restrictive Covenants, Trade Secrets

In almost every trade secret/restrictive covenant dispute, a company whose trade secret information has been stolen must confront the possibility that its customers will be dragged into the dispute. One company decided to take the bull by the horns pre-litigation and sent a letter to all of its customers notifying them of a misappropriation by one of its former employees … Continue Reading

Bubble Bursts On Plaintiff Who Failed To Demonstrate That Trade Secret And Confidential Information Related To His NASCAR-Themed “Pit Crew Chew” Was Protected By Non-Disclosure Agreement

Posted in Restrictive Covenants, Trade Secrets

A federal court in the Southern District of California recently burst the bubble on a plaintiff’s suit alleging that the defendant, the alleged creator of a novelty chewing gum product, had stolen the plaintiff’s idea for a NASCAR-themed bubble “chew” by granting the defendant’s motion for summary judgment.

The decision provides a reminder to companies that provide confidential and trade … Continue Reading

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 … Continue Reading

California Federal District Court Awards $ 6.6 Million In Damages In Trade Secret Suit

Posted in Restrictive Covenants, Trade Secrets

After granting summary judgment for plaintiff in late November 2007, Judge Susan Illston of the U.S. District Court for the Northern District of California recently awarded plaintiff $6.6 million in damages, the majority of which related to future lost profits due to breach of contract and misappropriation of trade secrets. Although the motion for summary judgment was uncontested, the court’s … Continue Reading

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 … Continue Reading

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 … Continue Reading

Coldwell Banker Sues Former Executives Who Form Competing Brokerage, Take Staff, Clients, and Trade Secrets

Posted in Computer Fraud, Restrictive Covenants

Coldwell Banker Residential Brokerage v. D’Ambrosia, No. 08-CV-00166, Complaint (D. Md. Jan. 18, 2008)

On January 18, 2008, Coldwell Banker Residential Brokerage filed a federal lawsuit in Maryland against three former key employees and newly-formed competitor Car-Tay, Inc., an affiliate of GMAC Real Estate. The complaint alleges that the former employees, two of whom had been high-level executives, conspired to … Continue Reading

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,” … Continue Reading

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 … Continue Reading

Southern District of Georgia Upholds Mutual No-hire Restriction between Companies

Posted in Restrictive Covenants

In Celtic Maintenance Services, Inc. v. Garrett Aviation Services, Inc., No. CV 106-177, 2007 WL 4557775 (S.D. Ga. Dec. 21, 2007 (Wood, J.)), the United States District Court for the Southern District of Georgia upheld a no-hire provision between two businesses. The case involved an agreement between Celtic and Garrett in connection with Garrett paying Celtic to perform aviation maintenance … Continue Reading

Non-Compete Dispute Turns on Value of Shares

Posted in Restrictive Covenants

A recently filed action in state court in Duluth, Minnesota illustrates the problems that can arise when a business divorce goes wrong. The case involves EmpowerMX, a Duluth-based maker of software for airlines. EmpowerMX filed a lawsuit against its founder, Barry Sinex, alleging that Sinex intended to violate the non-compete provision in his separation agreement with the company.

Sinex argues … Continue Reading

Defense Contractor Wins Nearly $23 Million in Trade Secrets Lawsuit Against Former Employees

Posted in Restrictive Covenants

Innovative Technologies Corp. v. Kenton Trace Technologies LLC et al., case number 03-cv-3674

Innovative Technologies Corp. (ITC) has won nearly $23 million in a trade secret suit against three former employees who competed against ITC while still employed by the Ohio-based defense contractor. The state jury awarded $17 million in punitive damages, in addition to $5.7 million in compensatory damages. … Continue Reading

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 … Continue Reading