In just a matter of weeks, we have a second case (see Consulting Engineers Corp. v. Geometric, Ltd.) in which plaintiffs sought to use a choice of law clause as a forum selection clause. In this case as well, the plaintiffs were unsuccessful. 

A Delaware Court of Chancery recently held that it lacked jurisdiction over a non-resident against whom

Continue Reading Mobile Diagnostic Group Holdings v. Suer: Negotiating A Non-Competition Contract Does Not Subject A Non-Resident to Jurisdiction

The United States Court of Appeals for the Fourth Circuit recently affirmed the denial of jurisdiction by the United States District Court for the Eastern District of Virginia over two companies foreign to the Commonwealth of Virginia. See Consulting Engineers Corp. v. Geometric, Ltd., — F.3d —, 2009 WL 738165 (4th Cir. Mar. 23, 2009). Consulting Engineers Corporation (“CEC”) sued

Continue Reading Consulting Engineers Corp. v. Geometric, Ltd.: Fourth Circuit Holds That Negotiating Non-Competition Agreements Does Not Subject A Company To Personal Jurisdiction

The First Circuit recently rejected a taxpayer’s claim for a refund based on recharacterization of a payment for a noncompetition agreement. Muskat v. United States, 2009 WL 211067 (1st Cir. 2009).

Irwin Muskat was the CEO and largest shareholder of his company, Jac Pac Foods. He entered into an agreement with Corporate Brand Foods America to sell the company

Continue Reading Muskat v. United States: Considering Tax Ramifications for Non-Competition Income.

Massachusetts Rule of Professional Conduct 5.6 prohibits non-competition agreements for attorneys, and provides in part: “A lawyer shall not participate in offering or making . . . a partnership or employment agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement. . . .” The Massachusetts Supreme Judicial

Continue Reading Prohibition on attorney non-competition agreements protects clients, not attorneys

The Sixth Circuit Court of Appeals recently held that whether a trade secret is a protectable interest is an equitable question not affected by the lack of a written instrument. Niemi v. NHK Spring Company, — F.3d —, 2008 WL 4273123 (6th Cir. Sept. 19, 2008).

Richard Niemi is an individual engineer who provides various automobile company manufacturers

Continue Reading Trade Secrets Derive From “Equitable Principles” Rather Than Property or Contract Rights

A maritime attachment arising out of a contract action is appropriate where the underlying contract’s nature and character is one of maritime and not simply a non-competition agreement, the Second Circuit ruled recently in Williamson v. Recovery Ltd. Partnership, __ F.3d __, 2008 WL 3876570 (Aug. 22, 2008).

The plaintiffs in Williamson had assisted a recovery operation for the

Continue Reading Two Ships Passing In The Night: Is It A Maritime Or Non-Compete Contract? Williamson v. Recovery Ltd. Partnership

Where hearsay and speculation form the sole basis for a complaint, summary judgment and sanctions against counsel will be the result, according to a recent decision of the Third Circuit. In Brubaker Kitchens, Inc. v. Brown, 2008 WL 2123327 (3d Cir. 2008), the Court granted defendants summary judgment and sanctioned plaintiff’s counsel because non-competition allegations against a defendant lacked

Continue Reading Brubaker Kitchens, Inc. v. Brown: Unfounded Speculation Can Lead To Sanctions

The 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 of aircraft parts to

Continue Reading Primetech v. Cohen: No Duty Of Loyalty To Past Employers

Georgia’s Trade Secrets Act prohibits knowing misappropriation of trade secrets. See Ga. Code Ann. § 10-1-761. In a recent decision, the Eleventh Circuit briefly examined this principle in affirming a district court’s grant of dismissal and concluded that the Complaint must set forth facts from which the court could infer that any misappropriation of trade secrets was knowing. Southern

Continue Reading Southern Nuclear Operating Co., Inc. v. Electronic Data Systems Corp., 2008 WL 1700204 (11th Cir. April 14, 2008)

The 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 medical imaging clinics, providing

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)