On February 16, 2023, the FTC hosted a public forum for the purpose of examining the proposed rule banning non-compete agreements. The agenda included, among other things, opening remarks from Chair Kahn, an overview of the rulemaking process by the FTC’s general counsel, a panel discussion, and comments from the public. A recording of the forum is available here.
In her preliminary remarks, Chair Kahn claimed that the proposed rule would increase workers’ earnings significantly and non-competes are an unfair method of competition. She claimed that the FTC has deep expertise on non-competes based upon enforcement, analysis, and addressing public comments. During the explanatory session, FTC staff explained that the comment period ends March 20th and encouraged the submission of additional comments. Staff also explained the functional test in the proposed rule and indicated that the ban applies to any agreement that functionally operates as a non-compete, which could be an overly broad non-disclosure agreement or training repayment agreement. FTC staff stated that the proposed rule does not apply to “run of the mill non-disclosures.”Continue Reading FTC Holds Public Forum Examining Proposed Rule to Ban Noncompete Clauses and Business Organizations Sharply Criticize It
On September 1, 2022, Representative Mike Garcia (CA-25) 
In June 2022, a federal judge sitting in the Southern District of New York issued an order denying defendants Lionbridge Technologies, Inc. (“Lionbridge”) and its parent company HIG Middle Market, LLC (“HIG”) attorneys’ fees and costs related to their assertion that plaintiff Transperfect Global, LLC (“Transperfect”) brought a misappropriation of trade secrets claim under the Defend Trade Secrets Act (“DTSA”) in bad faith. The 2019 lawsuit was filed roughly 15 months after completion of a bidding war for the sale of Transperfect in a Delaware court-supervised auction. One of the participants in the auction was HIG, which had acquired Lionbridge—a competitor of Transperfect—in February 2017. In its suit, Transperfect alleged that HIG engaged in “fake bidding” during the auction so that it could access trade secrets in the form of confidential pricing data and customer lists and improperly share them with Lionbridge to poach two of Transperfect’s biggest clients.
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.
As in real estate, as in law. A recent ruling in the USDC for the District of Colorado demonstrates that procedural considerations of where to file may often have substantive consequences. Plaintiff LS3, Inc. (“LS3”) sued Cherokee Federal Solutions, LLC (“CFS”) and various former employees of LS3 in the United States District Court for the District of Colorado. The gist of the action was that CFS, a competitor of LS3, solicited away former employees of LS3 to work for CFS in violation of employee non-compete agreements. Claims were asserted against the individual employees for breach of the restrictive covenant agreements and against CFS for tortious interference with those same agreements. Critically, the agreements at issue all contained Maryland choice-of-law provisions but apparently no venue or forum provisions.
Earlier this month, Plaintiff Bright Side, LLC dba Herbal Edibles, a manufacturer of cannabis edibles, filed a lawsuit in New Mexico state court to enforce a 3-year non-compete and enjoin the misappropriation of its trade secret cannabis recipes by one its former bakers, Christina Johnson.
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