The Board sent shockwaves through employment law in its February 21, 2023, decision in McLaren Macomb, which held that simply offering a draft settlement agreement with broad confidentiality and non-disparagement provisions violated the National Labor Relations Act (“NLRA”). We previously blogged about the McLaren decision and encourage you to read that post for a summary of the decision.

McLaren left unanswered a host of critical questions and, in the month following the decision, employers have not received any further clarity from the Board regarding how this decision will play out in practice. But some clarity—welcome or unwelcome—is coming. At some point this week, General Counsel Jennifer Abruzzo plans to release a guidance memo that will elaborate on the Board’s position.

Continue Reading NLRB to Release Memo Clarifying Impact of McLaren Macombs on Confidentiality and Non-Disparagement Restrictions

As our colleagues have previously reported in this blog, on January 5, 2023, the Federal Trade Commission issued a notice of proposed rulemaking (NPRM) concerning its unprecedented effort to ban all non-compete clauses with workers and to preempt state law on the issue. The NPRM followed just one day after the FTC announced that it had reached a consent settlement with three companies for alleged unfair trade practices by imposing overly burdensome non-compete agreements.

Not surprisingly, the NPRM has sparked a surge of commentary in the legal and business communities and immediately courted controversy. The sole Republican member of the FTC, Commissioner Christine S. Wilson, issued a vigorous dissent, arguing:

Continue Reading Answering the $296 Billion Question: FTC’s Proposed Rulemaking on Worker Non-Competes Likely to be Found Unconstitutional

Cases don’t try very often. Doubly so in trade secret/non-compete litigation. So many of these disputes get resolved at the injunctive relief phase of the proceeding that, when one goes the distance, it is almost always worth peeking under the hood.

In MWK Recruiting, Inc. v. Jowers, No. 1:18-cv-444-RP (W.D. Tex.), a federal district court judge recently entered a judgment for $3.6 million—before fees and costs—against a former external law firm recruiter. The facts are not complex. A recruiter left his employer and joined a competitor. But before the recruiter left his former employer, he began using his personal email for candidate submissions and allegedly laundered six lateral candidates through the founder of his new employer. His former employer sued him and alleged that he misappropriated trade secrets and breached non-compete and non-solicitation covenants in his employment agreement. At trial, the district judge found in the plaintiff/employer’s favor on both claims and entered a $3.6 million damages award, with about $500,000 awarded under the misappropriation claim and $3 million under the breach of contract claim.

Continue Reading Lessons from a Staffing Misappropriation and Non-Compete Trial

SEC whistleblower Everyone generally agrees that people and organizations should be able to protect their proprietary and valuable information. But one area where we’ve seen legislative fretting is when that principle potentially impedes reporting wrongdoing to the government. As we have previously blogged, Congress and many state legislatures are exploring (or, in some cases, already enacted) legislative protections for reporting suspected misconduct to the government. And, at the federal level, Congress enacted the Defend Trade Secrets Act, which provides immunity for the disclosure of a trade secret if made in confidence to an attorney or government official for the purpose of investigating a suspected violation of law.
Continue Reading Recent SEC Order Reiterates Need for Affirmative Whistleblower Exclusion

federal restrictive covenant legislationLast week, in connection with a House Oversight hearing, Representative Carolyn Maloney (D-N.Y.) introduced legislation to restrict confidentiality provisions from covering claims of discrimination, harassment, and retaliation. The “Accountability for Workplace Misconduct Act,” H.R. 8146, appears to be a federal effort to expedite the state-level trend to exempt discrimination, harassment, and retaliation information from confidentiality restrictions.

Over the last decade, lawmakers at the state and federal level have introduced and passed legislation designed to limit the reach of confidentiality provisions in certain circumstances. Those modifications include:
Continue Reading House Introduces Legislation Restricting Confidentiality Provisions in Settlement Agreements

Robert Milligan, Seyfarth partner and co-chair of the firm’s Trade Secrets, Computer Fraud & Non-Competes group, and associate Alex Meier recently attended the Sedona Conference on Trade Secrets (Working Group 12) in Denver, Colorado. Working Group 12 seeks to aid judges and practitioners in developing consensus-based guidelines for managing trade secret litigation and protecting trade secrets.
Continue Reading Recap! The Sedona Conference on Trade Secrets (Working Group 12) in Denver

This blog post is the author’s opinion and is for educational and informational purposes only. It provides general information and a general understanding of the law, but does not provide specific legal advice. Please feel free to reach out to a Seyfarth Trade Secrets attorney if you’d like to discuss your particular situation.

Before Georgia enacted a constitutional amendment in 2011 to allow the enforcement of reasonable restrictive covenants, Georgia was a popular venue for companies and individuals to avoid non-competes and non-solicits. A recent personal jurisdiction decision in which the Georgia Supreme Court affirmed that a foreign corporation’s registration to do business in Georgia amounts to an implicit consent to general personal jurisdiction raises the question of whether Georgia will once again become a popular forum to try to void restrictive covenant agreements—at least for agreements executed before May 11, 2011.

To understand why, we’ll begin with a brief overview of Georgia’s history as a hostile venue to restrictive covenants and trends in personal jurisdiction decisions before returning to Cooper Tire’s facts and potential impact on restrictive covenants.
Continue Reading Does Georgia Decision on Personal Jurisdiction Present an Invitation to Forum Shop For Non-Compete Disputes?

This blog post is the author’s opinion and is for educational and informational purposes only. It provides general information and a general understanding of the law, but does not provide specific legal advice. Please feel free to reach out to a Seyfarth Trade Secrets attorney if you’d like to discuss your particular situation.

I recently wrapped up a series of hard-fought cases centering around restrictive covenant violations and trade secret misappropriation. In the draw-down that follows, I always find it helpful to take some time to reflect on lessons learned—both for my client and for improving my approach in subsequent cases.

In future cases, I’m going to take a harder look at whether to ask for a jury trial in a standard employee departure case when I represent the plaintiff. When you represent the plaintiff, the natural tendency is to want a jury. The standard misappropriation story can be gripping and morally intuitive; the normal citizen has a general sense that a person should adhere to agreements they made and should not steal property or propriety information. Doubly so when the departing employee has taken steps to mislead the employer about their future activities.
Continue Reading Do You Want a Jury Trial in a Trade Secrets or Non-Compete Case?

Seyfarth Partners Robert Milligan, Erik Weibust, and Marcus Mintz, as well as senior associate Alex Meier will each be participating in the 2021 Annual Meeting of The Sedona Conference Working Group 12 (WG12) on Trade Secrets on December 13-14, 2021 in Phoenix, Arizona.

The mission of Working Group 12 is to develop consensus and nonpartisan principles for managing trade secret
Continue Reading Seyfarth Attorneys to Participate at 2021 Annual Meeting of The Sedona Conference Working Group 12 (WG12) on Trade Secrets