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

On Friday, July 9, 2021, the Biden Administration released its executive order on “Promoting Competition in the American Economy.” We previously wrote about the forthcoming order and predicted that the executive order’s treatment of non-compete provisions would be a general call to rulemaking versus a more authoritative or immediate directive to the FTC.
Continue Reading President Biden Issues Executive Order Encouraging the FTC to Consider Curtailing the Use of “Unfair” Non-Competes, but Without Providing any Additional Guidance or Details

The Biden Administration plans to issue an executive order calling on the Federal Trade Commission (FTC) to adopt rules to limit the use of noncompete clauses in employment agreements. According to Axios, White House Press Secretary Jen Psaki told reporters that “roughly half of private sector businesses require at least some employees to enter noncompete agreements, affecting over 30 million people. This affects construction workers, hotel workers, many blue-collar jobs, not just high-level executives. [President Biden] believes that if someone offers you a better job, you should be able to take it. It makes sense.” Indeed, in 2016, then Vice President Biden went on the record that “no one should have to sit on the sidelines because of an unnecessary non-compete agreement.” While the intervening years have not seen any federal action on non-competes, a number of states have enacted legislative changes to narrow the scope and availability of noncompete agreements.
Continue Reading Biden to Ban Non-Competes?

In a long-awaited decision, the Supreme Court resolved a circuit split about whether an individual with access to a computer system violates the Computer Fraud and Abuse Act (“CFAA”) by accessing information for an improper purpose. By a 6-3 decision authored by Justice Barrett, the Court held that an individual does not “exceed authorized access” within the meaning of the CFAA by misusing access to obtain information that is otherwise available to that person. While the case heard by the high court was a criminal case involving a former law enforcement officer’s criminal conviction, the decision nonetheless has broad ramifications for trade secrets and restrictive covenant litigation, as CFAA claims were often brought against employees who misused access rights to misappropriate information. The CFAA is a criminal statute that also provides a civil remedy, and CFAA claims were commonly raised to acquire federal subject matter jurisdiction, especially prior to the enactment of the Defend Trade Secrets Act in 2016, which provided an independent private cause of action in federal court for trade secret misappropriation.
Continue Reading Supreme Court Resolves Circuit Split on Access Under Computer Fraud and Abuse Act