Washington state has joined the ranks of an ever-growing number of states that impose significant restrictions on employee non-compete agreements. On May 9, 2019, Governor Jay Inslee signed House Bill 1450, titled “An Act Relating to restraints, including noncompetition covenants, on persons engaging in lawful professions, trades, or businesses,” into law. The Act will go into effect on January 1, 2020. We reported on the bill in detail in March.

This change to Washington law is significant. Businesses with employees or independent contractors in the state should revisit their non-compete agreements and take the necessary steps to ensure compliance with the Act by the end of this year. Among other things: Continue Reading Washington State Governor Signs Law Severely Limiting Non-Competes

In Seyfarth’s third installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys Katherine Perrelli, Justin K. Beyer, and Amy Abeloff focused on the key provisions of the Defend Trade Secrets Act, how the DTSA has evolved since it was passed three years ago, and what to expect in the future.

As a conclusion to this well-received webinar, we compiled a summary of takeaways:

  • The Defend Trade Secrets Act of 2016 created a federal civil cause of action for owners of trade secrets that have been misappropriated. While the DTSA is very similar to the UTSA, there are a few key differences to be aware of—such as the DTSA’s ex parte seizure option, which may be brought by a plaintiff without notice to an adversary, and the DTSA’s whistleblower immunity.
  • If an employer does not include the statutory whistleblower notice language in its employment (and consultant) agreements and employment policies that include provisions protecting against the disclosure of trade secret and confidential information, the employer may not be awarded exemplary damages or attorney’s fees in a misappropriation action against an employee (or consultant) to whom the notice was not provided.
  • As courts continue to consider DTSA cases, it is important to track how courts around the country interpret the DTSA against its state law counterparts to better understand the interplay between the two. While there are a number of overlapping provisions between the DTSA and the UTSA, understanding the differences can help practitioners better predict outcomes when evaluating whether to bring state-law, DTSA, or DTSA and UTSA claims.

Cross-Posted from The Global Privacy Watch Blog

In Part 1 of our ‘Texas Joins the Privacy Fray’ series, we focused on the Texas Consumer Privacy Act. Here, we shine the light on the Texas Privacy Protection Act (HB 4390).

The TXPPA is distinguishable from both the TXCPA and the CCPA because the applicability threasholds are different. For the TXPPA to apply, a business must 1) be doing business in Texas; 2) have more than 50 employees; 3) collect personally identifiable information (“PII”) of more than 5,000 individuals, households, or devices (or has it collected on the business’s behalf); and 4) meet one of the following two criteria—the business’ annual gross revenue exceeds $25 million; or the business derives 50% or more of its annual revenue from processing PII. Continue Reading And Texas Joins the Privacy Fray – Part 2 (or, Everything is Bigger in Texas…)

Cross-Posted from The Global Privacy Watch Blog

Last month, Texas saw the introduction of not one, but TWO privacy bills in the Texas state legislature: The Texas Consumer Privacy Act (TXCPA) and the Texas Privacy Protection Act (TXPPA). With news of this likely meeting with a collective groan and shoulder shrug, we do have some good news for you.

Both bills’ foundations are set with familiar CA Consumer Privacy Act (“CCPA”) language. Unfortunately, this is also bad news because they both suffer from the same problems found in the CCPA – we’ll explain below. It’s also still early in the game, with the bills having just been filed in the state legislature. Given that there is time in the legislative session for amendments to be made and especially considering the ‘ring-side’ view Texas lawmakers have to the CA legislative and Attorney General rule/procedure process currently unfolding, it would be unreasonable not to expect changes. Finally, the bills are reactive responses to the national (or international) focus on privacy issues of late and may allow impacted businesses a grace period, as we’ve seen in the CCPA. In this blog, we shine the light on the first of these bills: The Texas Consumer Privacy Act. Continue Reading And Texas Joins the Privacy Fray – Part 1 (or, the Elephant in the room just got a LOT bigger…)

Caramel Crisp LLC, the owner of Garrett Popcorn Shops (“Garrett”), the renowned Chicago-based purveyor of deliciously flavored popcorn, recently filed suit in federal court in Chicago against its former director of research and development, Aisha Putnam, alleging that she misappropriated the company’s trade secrets, including its recipes for Garret’s famous popcorn, after she was fired. Putnam was hired in 2014 and was eventually promoted to the role of Director of Research and Development, where she had access to some of Garrett’s most confidential information and trade secrets. In that role, she was required to sign a confidentiality and non-compete agreement, which, among other things, required her to return all of Garrett’s confidential information upon the termination of her employment. Continue Reading Get Out Your Popcorn: Former Director of R&D Accused of Stealing Secret Popcorn Recipes

The Financial Industry Regulatory Authority (FINRA) recently issued some expectations/guidance to industry members on FINRA’s expectations when a broker leaves for another firm. Specifically, on April 5, 2019, FINRA issued Regulatory Notice 19-10, which instructs/reminds FINRA member firms to: (1) promptly and clearly communicate to customers how their accounts will continue to be serviced when the broker servicing the customer leaves for another firm; and (2) if requested by the customer, provide customers with timely and complete answers, if known, to questions about a departing broker. Continue Reading FINRA Issues Guidance on the Handling of Customers When a Broker Leaves a Firm

As readers of this blog know, most trade secret misappropriation claims are brought in civil complaints—but a recent case out of Pennsylvania reveals how quickly the tables can turn on a civil plaintiff asserting claims against her former employer, resulting not only in civil counterclaims for trade secret misappropriation, but also in criminal prosecution. This case reveals how defense counsel can—and should—take an aggressive approach to protection of clients’ confidential and trade secret information, not only to preserve clients’ claim that such information is confidential, but to obtain critical leverage in high-stakes litigation.  Continue Reading Nursing Assistant’s “Self-Help” Attempt to Bolster Her Discrimination and Wage Claims Backfires in Spectacular Fashion

Seyfarth Partner and Co-Chair of the Trade Secrets, Computer Fraud & Non-Competes Practice Group Robert Milligan contributed to the International Chamber of Commerce (ICC) report “Protecting Trade Secrets—Recent EU and US Reforms.”

The report outlines the differences between the recent EU and US laws and provides guidance for businesses on how to identify trade secrets and how to put in place practical measures to ensure protection. The report also includes recommendations for policymakers on the establishment or reform of trade secret protection frameworks.

The report is available as a free download on the ICC website.

On Thursday, May 2 at 12:00 p.m. Central Time, in Seyfarth’s third installment of its 2019 Trade Secrets Webinar Series, Seyfarth attorneys will focus on the key provisions of the Defend Trade Secrets Act, and how the DTSA has evolved since it was passed three years ago.

Seyfarth attorneys Katherine Perrelli, Justin K. Beyer, and Amy Abeloff will address the following topics:

  • What is a trade secret and how is it misappropriated
  • Brief history of the DTSA
  • Primary ways in which the DTSA differs from most state statutes
  • Best practices for clients for preparing for potential DTSA claims
  • How the DTSA has evolved over the past three years
  • What to expect in the future

Register for the webinar here. 

If you have any questions, please contact Colleen Vest at cvest@seyfarth.com and reference this event.

*CLE Credit for this webinar has been awarded in the following states: CA, IL, NJ and NY. CLE Credit is pending for GA, TX and VA. Please note that in order to receive full credit for attending this webinar, the registrant must be present for the entire session.

The American Intellectual Property Law Association (AIPLA) will host its annual Spring Meeting in Philadelphia on May 15-17, 2019.

Loews Philadelphia Hotel
200 Market Street
Philadelphia, PA 19107

Seyfarth Partner John Tomaszewski is on the panel for “The California Privacy Act of 2018: A Review of California’s New Privacy Law and Tips for Implementing Compliance Measures” session on Thursday, May 16. Partner Erik Weibust is Vice Chair of the AIPLA Trade Secret Law Committee and helped coordinate the trade secret track at the Spring Meeting.

Find more information and register here.