Three very recent decisions reflect the irreconcilable division of judicial authority regarding the adequacy of at-will employment as the sole consideration for an otherwise valid non-compete. Compare (a) Standard Register Co. v. Keala, No. 14-00291 (D. Haw., June 8, 2015) (adequate under Hawaii law) (“majority rule”), with (b) Hunn v. Dan Wilson Homes, Inc., Nos. 13-11297 and 14-10365 … Continue Reading
The parties in a Computer Fraud and Abuse Act case moved for partial summary judgment. Among the issues were whether the plaintiff had incurred the requisite $5,000 in qualifying losses, and whether the complaint was time-barred. The motions were denied, but the court had to do a lot of explaining. Quantlab Technologies Ltd. v. Godlevsky, Case No. 4:09-CV-4039 (S.D.Tex., … Continue Reading
An employee executed an employment agreement which included a two-year covenant not to solicit the employer’s customers. When the employer sold the company’s assets, the sale included that agreement. The employee then went to work for the assets purchaser but subsequently resigned. The Texas Appellate Court held that the two-year period began to run on the date the assets seller … Continue Reading
In a recent Texas federal court ruling, a competitor closely aligned with, and seemingly assisted by, a signatory of a non-compete covenant narrowly avoided a preliminary injunction because the assistance was not shown to have been substantial.
Summary of the case. In connection with the purchase and sale of a partnership’s assets, a partner of the seller signed a covenant … Continue Reading
An employee entered into non-compete and confidentiality agreements with his employer. Following his resignation from that company, he went to work for a competitor. His job functions and territory with both employers were similar. In a suit for violation of the non-compete and confidentiality agreements, a Texas federal court held recently that — absent an injunction — disclosure to his … Continue Reading
A Texas federal trial court, finding the absence of any legal precedence to award an ongoing royalty in a trade secret misappropriation case, looked to the patent laws to impose an ongoing royalty. As a result, rather than permanently enjoining the misappropriator from continuing, the trial court imposed a royalty, thereby allowing the victim some compensation but allowing the other … Continue Reading
The Texas Uniform Trade Secrets Act was signed into law in 2013 and applies to any misappropriation of trade secrets occurring on or after September 1, 2013. Texas trial and appellate courts will be interpreting these new provisions of Texas law as new trade secrets cases work their way through the legal system. Randy Bruchmiller weighs in on a couple … Continue Reading
In two unrelated cases decided earlier this month, employers failed in their attempts to enjoin former employees from competing. The Texas First District Court of Appeals vacated parts of the lower court’s injunction order, one part because it did not detail with sufficient specificity the conduct that was enjoined, and another part where the order was sufficiently specific but erroneously … Continue Reading
Seismic information about potential oil and gas reservoirs and other sensitive data are regularly used by energy companies to make business decisions and compete in the market. Energy companies must take reasonable precautions to protect such trade secrets. For example, trade secret status may be destroyed if the trade secret is disclosed to a party that has not signed a … Continue Reading
Under Texas law, disclosure of a trade secret to potential investors to enable them to decide whether to invest does not destroy secrecy. Those who learn of the confidential information under those circumstances are not authorized to destroy its protection and may not use the information in a manner harmful to the interests of the one making the disclosure.
Summary … Continue Reading
Earlier this month, New York Pizzeria, Inc., a pizzeria chain with over thirty restaurants in the United States and the Middle East, filed a complaint in federal court in Texas alleging trade secret misappropriation. New York Pizzeria alleged that a former employee, as well as individual restaurant owners, were conspiring … Continue Reading
Until recently, Texas common law governed misappropriation of trade secrets lawsuits in Texas. That changed when he 2013 Texas legislature adopted a version of the Uniform Trade Secrets Act (“UTSA”). The new act is known as the Texas Uniform Trade Secrets Act (“TUTSA”). New York and Massachusetts are now the only two states to not adopt some form or variation … Continue Reading
Texas recently adopted a version of the Uniform Trade Secrets Act (“UTSA”). The new act will be known as the Texas Uniform Trade Secrets Act (“TUTSA”). New York and Massachusetts are now the only two states to not adopt some form or variation of the UTSA.
The TUTSA takes effect during the Labor Day weekend on September 1, 2013. However, … Continue Reading
In Texas, physician noncompetition agreements must contain buyout provisions to be enforceable. That is, the physician must be allowed to buy his or her way out of the geographical and temporal restrictions the noncompetition agreement imposes. … Continue Reading
Overview. Nationsbuilders, an insurance underwriter, and two of its ex-employees executed a contract which contained a covenant barring the individuals, for one year, from competing with the underwriter or working for an “entity that conducts or plans to conduct a business that is in competition” with the underwriter. The ex-employees used that year to prepare for the competition that would … Continue Reading
The new law adopts a version of the Uniform Trade Secrets Act.
The law will take effect on September 1, 2013 and will apply to a misappropriation of trade secrets that takes place on or after that date.
I summarized some of the … Continue Reading
Common law presently governs misappropriation of trade secrets lawsuits in Texas.
Please join Seyfarth Shaw on October 10, 2012 for an informative breakfast briefing entitled Trade Secrets, IP and Your Employees as we discuss the following topics:
•Analysis of Real-World Situations Where Former Employees Have Attempted To Loot The Company’s Employees and Confidential Information and Take Them to a Competitor
•New Options Available With Noncompetition Agreements
•Methods to Protect Confidential Information … Continue Reading
Employers periodically fail to sign employment agreements. This situation generally occurs when the employer obtains an employee’s signature on a form employment agreement and simply puts the document in the employee’s personnel file. In this scenario, the signature of an authorized representative of the company is never added to the document. The missing signature usually comes to … Continue Reading
When confidential information or trade secrets are provided to a government agency in a bid for a public contract, they might wind up being disclosed to a competitor or others unless great care is taken by the bidder. Non-disclosure agreements are essential. Of course, all pages containing a trade secret should be designated as “confidential.” Examples of other protective measures … Continue Reading
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
Under Texas law, a restraint on competition without reasonable time and geographical limitations is unenforceable. Although New York generally disfavors an unreasonable non-competition covenant, there is an exception under the employee-choice doctrine. A recent Texas appellate court panel, applying Texas law, reversed a lower court order declaring valid under New York law an employment contract provision imposing a substantial penalty … Continue Reading
A recent decision by the Texas Supreme Court makes it easier for employers to enforce restrictive covenants in Texas. Employers often seek to obtain these types of contracts with key employees to prevent them from going to work for competitors or to leave to start competing businesses. The enforceability of such contracts is typically governed by state law, resulting in … Continue Reading
The Texas Supreme Court has once again ruled in favor of enforcing non-competition agreements. On April 17, 2009, the Court held that “if the nature of the employment for which the employee is hired will reasonably require the employer to provide confidential information to the employee for the employee to accomplish the contemplated job duties, then the employer impliedly promises to … Continue Reading