Non-Compete Enforceability

On October 9, Los Angeles County Superior Court Judge Frederick Shaller confirmed his tentative decision weeks earlier that the “show cause” penalty in the NCAA’s bylaws violates California law.

The decision was issued as a tentative ruling on plaintiff (former running back coach at USC) Todd McNair’s claim for declaratory relief. McNair sought—and received—a determination that the NCAA bylaw provisions including the “show cause order” penalty levied against him were void under Cal. Bus. & Prof. Code § 16600.      Continue Reading California State Court Rules that NCAA “Show Cause” Penalty Constitutes an “Unlawful Restraint” Under California Law

On Wednesday, November 28, 2018, at 1:00 to 2:30 p.m. Eastern, Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is presenting a Strafford live webinar. The “Drafting Enforceable Non-compete and Non-Solicitation Agreements: Compliance with New State Statutes and Case Law” webinar panel will discuss recent legislative and case law trends regarding non-compete and non-solicitation agreements, offer best practices for structuring permissible contracts, and explain how to determine whether existing agreements are lawful.

The webinar will focus on the following topics:

  • What are the recent legislative changes affecting restrictive covenants?
  • What are the recent case law decisions affecting non-compete and non-solicitation agreements?
  • How can employers structure restrictive covenants to comply with new laws and decisions?
  • How can employment counsel analyze existing agreements for compliance?

For more information and to register for the webinar, click here.

Readers of our blog will recall that this summer, the Massachusetts legislature passed a non-compete reform bill after nearly a decade of fruitless attempts.  The new law goes into effect today, meaning that any agreements signed today or in the future will need to comply with the new law.

As a brief recap, the key provisions of the new bill are as follows: Continue Reading Today’s the Day: Massachusetts’ New Non-Compete Law Goes into Effect

Seyfarth Shaw Partners Erik Weibust and Robert Fisher recently published a Law360 article about the new Massachusetts Non-Compete Law that goes into effect on October 1, 2018. Weibust and Fisher describe the new rules, the impact of the new provisions, and how businesses can comply. To learn more about this new non-compete law in Massachusetts, check out “Navigating The New Mass. Noncompete Morass” from Law360 here.

 

What Businesses Need to Know About Non-Compete and Trade Secrets Law

Seyfarth’s Trade Secrets, Computer Fraud, and Non-Competes Practice Group is pleased to provide the 2018-2019 edition of our one-stop 50 State Desktop Reference, which surveys the most-asked questions related to the use of restrictive covenants and intellectual capital protection in all 50 states, including the recent non-compete legislation passed in Massachusetts this August. For the company executive, in-house counsel, or HR professional, we hope this guide will provide a starting point to answer your questions about protecting your company’s most valuable and confidential assets.

To request a hard copy or a pdf of the 2018-2019 edition of the 50 State Desktop Reference, click the button below.

In Seyfarth’s fifth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Kate Perrelli, Erik Weibust, and Dawn Mertineit focused on Massachusetts non-compete and trade secrets reform. At long last, Massachusetts Governor Charlie Baker signed a Non-Compete Reform Bill into law on August 10. The presenters focused on what businesses should understand about the impacts of the changes, what to expect next, and how to safeguard assets and maintain an advantage over competitors.

As a conclusion to this well-received webinar, we compiled a summary of takeaways:

  • Non-competes must be limited to one year, but can be extended to two if the employee breaches his or her fiduciary duty or steals company property.
  • Must be in writing and signed by both parties; at least 10 days’ notice must be provided to employees/candidates; and the right to counsel must be explicit in the agreement.
  • Garden leave is not required.  “Other mutually agreed-upon consideration” is adequate.  But what that means, and whether the court will even assess the adequacy of consideration, is left to the courts to determine.
  • Continued employment is no longer sufficient consideration.  Something more, that is “fair and reasonable” must be provided.  Again, what that means is left to the courts to determine.
  • Choice of law and venue requirements are likely unenforceable in other states and in federal court.  Nevertheless, comply with the law in case an employee files a declaratory judgment action in Massachusetts.
  • Bottom line:  Be clear in your agreements.  All the law really does is establish what must, may, and may not be included in private agreements.

Please join us for a one-hour CLE webinar on Thursday, August 16, 2018, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.

On August 10, Governor Charlie Baker signed a Non-Compete Reform Bill into law. Although the bill largely codifies existing common law, there are some significant changes that companies with employees is Massachusetts should be aware of. Among other things, non-competes may not be enforced against certain types of employees; continued employment will no longer be sufficient consideration for existing employees; any employees subject to non-compete restrictions must be provided with “garden leave” (i.e., 50% of their base pay) during the restricted period, or “other mutually agreed upon consideration” (which is not defined); there are new notification requirements, and agreements with Massachusetts employees purportedly may not apply the laws of other states or mandate venue for lawsuits outside of Massachusetts.

As part of the same overarching economic development bill, Massachusetts has also now joined 48 other states in adopting the Uniform Trade Secrets Act, which will also changes existing law (although without creating nearly as much confusion and uncertainty as the non-compete law).

Understanding the impact of these changes, and what to expect, will help your company safeguard its most valuable assets and maintain its advantage over competitors.  Please join Seyfarth Shaw’s Boston team for an informative webinar on what to expect when this law goes into effect on October 1, 2018.

Democratic U.S. Senators Elizabeth Warren (D-MA), Chris Murphy (D-Conn.), and Ron Wyden (D-Ore.) introduced legislation on April 26, 2018, entitled the Workforce Mobility Act (“WMA”). Although the text of the WMA is not yet available, according to various press releases, it would prohibit the use of covenants not to compete nationwide. In Senator Warren’s press release announcing her co-sponsorship of the bill, Senator Warren stated that “[t]hese clauses reduce worker bargaining power, stifle competition and innovation, and hurt Americans striving for better opportunities. I’m glad to join Senator Murphy to put an end to these anti-worker, anti-market agreements.”  Continue Reading Democratic U.S. Senators Seek to Abolish Non-Compete Agreements

This post originally appeared on the Workplace Class Action blog

Seyfarth Synopsis: True to his word, the Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice has announced the first of a number of anticipated no-poach enforcement actions. While this was a civil proceeding, the Department of Justice has said that in some cases it may treat the conduct as criminal. Many executives and HR professionals are unaware that the antitrust laws apply to the employment marketplace. Thus, if they have not done so already, employers should consider the implementation of compliance programs to make sure that appropriate employees are aware of these developments and risks. Continue Reading DOJ Announces First of a Number of Anticipated No-Poach Enforcement Actions – What Should Employers Do Now?

For the third year in a row, the Washington state legislature failed to pass non-compete legislation, declining to take action on two separate bills that would have severely restricted employers’ ability to enforce former employees’ non-competition agreements. Continue Reading Washington State’s Legislature Rains on Non-Compete Critics’ Parade Yet Again