shutterstock_208182985A severance agreement executed in connection with a Stark Truss employee’s resignation included a one-year non-competition clause.  It allowed the company unfettered discretion to decide if his new employer was a competitor and, if so, to terminate his severance.  The ex-employee took another job and sued Stark Truss in an Ohio court, seeking a declaration that he was entitled to
Continue Reading Court Upholds Non-Compete Giving Former Employer Discretion To Determine Whether Ex-Employee Is Working For A Competitor

shutterstock_406019920Palmetto bought the assets of Knight Systems’ mortuary transport business. The agreement of purchase and sale included (a) Palmetto’s commitment to buy body bags, at specified discounted prices, exclusively from Knight Systems for 10 years, and (b) Knight Systems’ promise not to provide mortuary transport services within 150 miles of Palmetto’s offices for the same period.  Notwithstanding the non-compete covenant,
Continue Reading Bring Out the Body Bags: Seller’s Covenant, In Asset Sales Agreement, Not To Compete Within 150 Miles For 10 Years Unenforceable

shutterstock_345216839Touzot was an employee of ROM, a seller of products used in making balsa wood model planes and boats.  His employment agreement included a post-termination customer non-solicitation covenant.  After he left ROM, he became a competitor.  The company sued him and his Ecuadorian supplier of balsa wood, which previously had been ROM’s supplier, alleging that they were colluding to steal
Continue Reading Despite Evidence That Ex-Employee Violated Customer Non-Solicitation Covenant, Injunction Denied Because No “Irreparable” Harm

shutterstock_276022649A physician signed a non-compete covenant, agreed to be enjoined if he breached, and allegedly did breach. But when his former employer asked a Providence, Rhode Island Superior Court judge to enter an injunction, he refused to prevent patients from being treated by a doctor of their own choosing. Medicine & Long Term Care Associates, LLC v. Khurshid, Civil
Continue Reading Court Won’t Enjoin Physician Who Breached Non-Compete Covenant And Consented To Injunction

shutterstock_350116652Reversing a 2-1 decision of the North Carolina Court of Appeals, the state’s Supreme Court held unanimously that an assets purchase-and-sale contract containing an unreasonable territorial non-competition restriction is unenforceable.  Further, a court in that state must strike, and may not modify, the unreasonable provision. Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, No. 316A14 (N.C.
Continue Reading North Carolina Courts Are Forbidden To “Blue Pencil” An Unenforceable Non-Compete

shutterstock_225248845Although an employer spent many hours assisting an employee to obtain a real estate appraiser’s license, the Tennessee Court of Appeals held recently that the employee’s restrictive covenants were unenforceable.  Davis v. Johnstone Group, Inc., No. W2015-01884-COA-R3-CV (Mar. 9, 2016).

Summary of the case.  The ex-employee, Davis, had no prior real estate appraisal experience in 1998 when he started
Continue Reading Extensive Training Of Ex-Employee By Former Employer Not Enough For Injunction Against Competition

shutterstock_113020912A long-running non-compete clause dispute has reached the Louisiana Court of Appeal three times.  Last month, the court affirmed a $600,000 judgment, plus attorneys’ fees and costs, against an ex-employee who assisted his son’s start-up company compete with his father’s former employer.  Pattridge v. Starks, No. 50,351-CA (Louisiana Court of Appeal, Feb. 24, 2016) (Endurall III).

Summary
Continue Reading Ex-Employee Hit With Six-Figure Judgment For Violating His Non-Competition Agreement By Helping His Son Compete

shutterstock_214450246An ex-employee’s former employer sued him for alleged violations of the Kansas Uniform Trade Secrets Act (KUTSA) and the federal Computer Fraud and Abuse Act (CFAA).  The first claim was based on the company’s hunch that he had misappropriated trade secrets and thereby breached his non-disclosure agreement.  Two forensic experts were paid $38,000 to examine the computers and flash drives
Continue Reading Federal Court Rejects Employer’s Trade Secret and Computer Fraud and Abuse Act Claims

shutterstock_131284286In a recent Computer Fraud and Abuse Act case, the Seventh Circuit Court of Appeals affirmed the district court’s conclusion that the plaintiff had produced no evidence refuting the defendant’s contention that it honestly believed it was engaging in lawful business practices rather than intentionally deceiving or defrauding the plaintiff.  Accordingly, entry of judgment for the defendant was appropriate.  Fidlar
Continue Reading Computer Fraud and Abuse Act Not Violated Unless Plaintiff Shows Defendant Had Intent To Defraud

shutterstock_334793126Continuing our tradition of presenting annually our thoughts concerning the top 10 developments/headlines this past year in trade secret, computer fraud, and non-compete law, here—in no particular order—is our listing for 2015 and a few predictions for 2016.  Please join us for our first webinar of the New Year on January 29, 2016 discussing these developments/headlines.

1) Enactment of federal
Continue Reading Top 10 Developments/Headlines in Trade Secret, Computer Fraud, and Non-Compete Law in 2015