Washington state has joined the ranks of an ever-growing number of states that impose significant restrictions on employee non-compete agreements. On May 9, 2019, Governor Jay Inslee signed House Bill 1450, titled “An Act Relating to restraints, including noncompetition covenants, on persons engaging in lawful professions, trades, or businesses,” into law. The Act will go into effect on January 1, 2020. We reported on the bill in detail in March.

This change to Washington law is significant. Businesses with employees or independent contractors in the state should revisit their non-compete agreements and take the necessary steps to ensure compliance with the Act by the end of this year. Among other things:
Continue Reading

Cross-Posted from The Global Privacy Watch Blog

In Part 1 of our ‘Texas Joins the Privacy Fray’ series, we focused on the Texas Consumer Privacy Act. Here, we shine the light on the Texas Privacy Protection Act (HB 4390).

The TXPPA is distinguishable from both the TXCPA and the CCPA because the applicability threasholds are different. For the TXPPA to apply, a business must 1) be doing business in Texas; 2) have more than 50 employees; 3) collect personally identifiable information (“PII”) of more than 5,000 individuals, households, or devices (or has it collected on the business’s behalf); and 4) meet one of the following two criteria—the business’ annual gross revenue exceeds $25 million; or the business derives 50% or more of its annual revenue from processing PII.
Continue Reading

Cross-Posted from The Global Privacy Watch Blog

Last month, Texas saw the introduction of not one, but TWO privacy bills in the Texas state legislature: The Texas Consumer Privacy Act (TXCPA) and the Texas Privacy Protection Act (TXPPA). With news of this likely meeting with a collective groan and shoulder shrug, we do have some good news for you.

Both bills’ foundations are set with familiar CA Consumer Privacy Act (“CCPA”) language. Unfortunately, this is also bad news because they both suffer from the same problems found in the CCPA – we’ll explain below. It’s also still early in the game, with the bills having just been filed in the state legislature. Given that there is time in the legislative session for amendments to be made and especially considering the ‘ring-side’ view Texas lawmakers have to the CA legislative and Attorney General rule/procedure process currently unfolding, it would be unreasonable not to expect changes. Finally, the bills are reactive responses to the national (or international) focus on privacy issues of late and may allow impacted businesses a grace period, as we’ve seen in the CCPA. In this blog, we shine the light on the first of these bills: The Texas Consumer Privacy Act.
Continue Reading

As readers of this blog well know, there is a growing trend of state legislatures seeking to limit or outright ban non-competes. (See here, here, and here as just a few examples of state efforts to curb non-competes—not to mention the proposed federal legislation and international efforts—in the last six months.) Last week, the Washington Senate jumped on the bandwagon by passing a bill with a 30–18 vote that would severely limit the enforceability non-competes. (Similar efforts failed last year, as we reported here.)  Some of the key features of this year’s bill are as follows:
Continue Reading

On February 21, 2019, the New Hampshire Senate, in a bipartisan voice vote and without debate, passed Senate Bill 197, which would prohibit employers from requiring low-wage workers to enter into non-compete agreements, and makes such agreements void and unenforceable.

The Bill applies to “Low-wage employees,” which is defined to include (i) employees who make less than or equal to twice the federal minimum wage, i.e., $14.50 per hour based on the current federal minimum wage of $7.25 per hour; and (ii) “tipped employees” under New Hampshire Revised Statute § 279:21, who make less than or equal to twice the tipped minimum wage (statutorily set at 45 percent of the federal minimum wage), i.e., $6.54 per hour. 
Continue Reading

Seyfarth Synopsis: The New Jersey Legislature recently passed Senate Bill 121 affecting claims of discrimination, harassment, and retaliation, which if signed into law, would render any prospective waiver of rights against public policy, including pre-dispute mandatory arbitration agreements. In addition, non-disclosure provisions in settlement agreements involving these  claims would be unenforceable against employees. 

On January 31, 2019, the New Jersey Legislature passed Senate Bill 121, which would prohibit employers from enforcing, among other things, mandatory pre-dispute arbitration and non-disclosure provisions in settlement agreements for claims of discrimination, retaliation, and harassment.  The bill seemingly does not affect existing waivers or non-disclosure agreements (“NDAs”).  Governor Phil Murphy has not commented publicly as to whether he will sign the bill into law.  If signed, the breadth of this law would surpass any similar law in the country.


Continue Reading

The 2018 Trading Secrets Year in Review is a compilation of our significant blog posts from throughout the year and is categorized by specific topics such as: Trade Secrets, Computer Fraud and Abuse Act, Non-Compete & Restrictive Covenants, Legislation, International, and Social Media and Privacy. As demonstrated by our specific blog entries, including our Top

In Seyfarth’s first installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys Michael Wexler, Robert Milligan, and Joshua Salinas reviewed noteworthy cases and legal developments from across the nation over the last year in the area of trade secrets and data theft, non-competes and other restrictive covenants, and computer fraud. Plus, they provided predictions

Continuing our annual tradition, we have compiled our top developments and headlines for  2018-2019 in trade secret, non-compete, and computer fraud law.

1. Government Agencies Increasing Scrutiny of Restrictive Covenants

In mid-2018, the Attorneys General of ten states investigated several franchisors for their alleged use of “no poach” provisions in their franchise agreements. In a July 9, 2018, letter, the Attorneys General for New Jersey, Massachusetts, California, Washington, D.C., Illinois, Maryland, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island requested information from several franchisors about their alleged use of such provisions. Less than twenty-four hours later, some franchisors (mostly different ones than those who received the information demands) entered into agreements with the Washington State Attorney General’s Office to remove such clauses from their franchise agreements. The recent focus by state law enforcement on franchisors is a new twist, given that restrictive covenant agreements in the franchise industry are typically given more leeway than in the employment context.
Continue Reading