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… Continue Reading
Tag Archives: restrictive covenants
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 CompetitionIllinois 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)…. Continue Reading
California Supreme Court To Announce Significant Trade Secret/Non-Compete Decision Tomorrow In Edwards v. Arthur Andersen
Posted in Restrictive Covenants, Trade SecretsAccording 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… 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 CovenantsBy 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… Continue Reading
Federal Court Structures Injunction to Allow Employee-Defendant to Continue to Receive Pay from New Employer
Posted in Restrictive CovenantsZimmer, 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… Continue Reading
Primetech v. Cohen: No Duty Of Loyalty To Past Employers
Posted in Restrictive CovenantsThe 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… Continue Reading
Florida Case Underscores the Expense and Difficulty in Enforcement of Non-Compete Clauses Against Employees
Posted in Restrictive CovenantsBy 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… 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 CovenantsThe 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… Continue Reading
Illinois Appellate Court Holds That “Fundamental Public Policy” and Lack of Consideration Doom Employment Agreement Restrictive Covenant
Posted in Restrictive CovenantsIn 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… 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 CovenantsIn 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,… 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 SecretsIn 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… 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 SecretsA 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… Continue Reading
California Appeals Court Upholds 5-Year, Statewide Non-Competition Covenant Contained In Agreement To Purchase Business
Posted in Restrictive CovenantsAlliant 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… Continue Reading
California Federal District Court Awards $ 6.6 Million In Damages In Trade Secret Suit
Posted in Restrictive Covenants, Trade SecretsAfter 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… Continue Reading
Parsing Non-Competition Clause, Georgia Court of Appeals Uncovers Unreasonable & Overbroad Restriction
Posted in Restrictive CovenantsTrujillo 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… Continue Reading
Magistrate Judge Denies Motion for Reconsideration in Trade Secrets Case
Posted in Restrictive CovenantsNational 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… Continue Reading
Coldwell Banker Sues Former Executives Who Form Competing Brokerage, Take Staff, Clients, and Trade Secrets
Posted in Computer Fraud, Restrictive CovenantsColdwell 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… Continue Reading
Illinois Appellate Court Warns Against Blue Penciling “Blatantly Unreasonable” Restrictive Covenants
Posted in Restrictive CovenantsOn 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,… Continue Reading
Wisconsin Court Invalidates Non-Compete and Non-Solicitation Contracts Lacking Fized and Definite Duration
Posted in Restrictive CovenantsA 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… Continue Reading
Southern District of Georgia Upholds Mutual No-hire Restriction between Companies
Posted in Restrictive CovenantsIn 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… Continue Reading
Non-Compete Dispute Turns on Value of Shares
Posted in Restrictive CovenantsA 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… Continue Reading
Defense Contractor Wins Nearly $23 Million in Trade Secrets Lawsuit Against Former Employees
Posted in Restrictive CovenantsInnovative 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… Continue Reading
Recent Developments in California Trade Secrets Law
Posted in Restrictive Covenants, Trade SecretsA 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… Continue Reading
North Carolina Court of Appeals Clarifies “In Any Capacity” Restriction
Posted in Restrictive CovenantsIn 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… Continue Reading