On April 13, 2020, the Department of Justice’s Antitrust Division and the Federal Trade Commission’s Bureau of Competition released a joint statement and press release regarding “competition in labor markets” and potential agency actions in the face of the COVID-19 crisis. While the agencies’ joint statement appears to be focused on collusion between employers entering into horizontal “no-hire” or “no-poach” agreements, employers in certain industries affected by the crisis should also exercise reasonable care in enforcing vertical restrictive covenants, including non-competition and non-solicitation agreements.
Continue Reading The DOJ and FTC Issue Joint Statement on Competition in Labor Markets in Light of COVID-19: What Effect, If Any, Does This Have on Non-Competes?

The Council of the District of Columbia is considering a new bill that would ban the use of non-compete restrictions for workers below certain income thresholds—and impose stiff penalties upon employers who include such restrictions in their agreements. Introduced on October 8, 2019, the Ban on Non-Compete Agreements Amendment Act of 2019 (“the Bill”) places D.C. in line to join a growing number of states where non-compete restrictions upon low-income—and, in some cases, relatively high-income—employees are unenforceable.

The Bill would ban the use of non-compete agreements for employees who work in D.C. and who earn up to three times the D.C. minimum wage: $87,654 annually under current law. The Bill would ban such restrictions not just in written agreements, but also in an employer’s “workplace policy” whether in writing (i.e., through an employee handbook) or as a matter of the employer’s practice. Not only would such restrictions be void as a matter of law, but any employer who had such restrictions in place, regardless of whether or not the employer enforced them, would be separately liable to each affected employee in an amount “not less than $500 and not greater than $1,000.” Employers who attempt to enforce non-compete restrictions that fall below the Bill’s income threshold would be liable to affected employees in an amount “not less than $1,500.” Finally, employers who retaliate against employees for either (1) alleged violations of non-compete restrictions that would be unenforceable under the Bill or (2) inquiring about or informing an employer that the employer’s non-compete restrictions may be unenforceable under the Bill, would be liable to each such employee in an amount “not less than $1,000 and not more than $2,000.” Beyond liability to affected employees, the Bill would also empower the Mayor of the District of Columbia to impose fines for violations of the Bill in an amount up to $500, except for retaliatory conduct for which the fine would be at least $1,000.
Continue Reading D.C. Poised to Ban Non-Competes Below Income Threshold

On June 28, 2019, Governor Mills signed LD 733, An Act To Promote Keeping Workers in Maine, into law.  The Act places limits on non-compete agreements and bans restrictive employment agreements.

Non-Compete Agreements

The Act defines a non-compete agreement as one restricting the employee “from working in the same or similar profession or in a specified geographic area for a certain period of time following termination of employment.”
Continue Reading Maine Governor Restricts Restrictive Covenants

A recent decision from the Supreme Court of Wisconsin affirmed a trial court’s grant of summary judgment in favor of a defendant accused of conspiring to misappropriate its competitor’s trade secrets. By a 4-3 decision in North Highland Inc. v. Jefferson Machine & Tool Inc., 2017 WI 75 (July 6, 2017), the Court found that plaintiff North Highland, Inc. (“North Highland”) had failed to present sufficient evidence of misappropriation or conspiracy to proceed beyond the summary judgment stage, prompting a notably sharp exchange with dissenting Chief Justice Patience D. Roggensack and a second dissent by two other justices.

Highland is a Wisconsin-based manufacturer of industrial products. One of the companies it distributed its products to was Bay Plastics, Inc., owned by Frederick Wells. Prior to 2011, Wells decided to form a separate company to manufacture the products which Bay Plastics sold, including some of the products which it purchased from North Highland. Wells formed Jefferson Machine & Tool Inc. (“Jefferson Machine”) along with Dwain Trewyn—Wells owned 75% of Jefferson Machine and Trewyn owned the remaining 25%. At the time of Jefferson Machine’s formation, Trewyn was employed by North Highland in sales. Trewyn did not have a non-competition agreement with North Highland, but also did not inform North Highland that he would also be working at Jefferson Machine.
Continue Reading Wisconsin High Court Affirms High Summary Judgment Bar to Trade Secret Misappropriation Claims

Every day, companies unknowingly give up intellectual property and trade secrets which they could have otherwise protected with simple processes. Poor R&D policies may not capture patent rights on a company invention. A faulty or simply outdated employment agreement may not protect a customer list used by an employee who leaves for a competitor. These pitfalls are easily avoidable by
Continue Reading Webinar Recap! Simple Measures for Protecting Intellectual Property and Trade Secrets

shutterstock_232392391While the Defend Trade Secrets Act of 2016 (“DTSA”) has only been in effect for a few months, the first wave of cases raising DTSA claims have started to generate federal decisions. In what appears to be the first substantive ruling under the Act, the Northern District of California illustrated some the advantages – and limitations – of DTSA claims
Continue Reading Federal Precedents Under the DTSA Have Arrived