Consistent with many jurisdictions which have adopted the Uniform Trade Secrets Act, Delaware’s version expressly preempts common law claims based on the misappropriation of trade secrets. See 6 Del. C. § 2007. In a recent opinion, Vice Chancellor Slights of the Court of Chancery dismissed a claim for unjust enrichment based on defendant’s alleged misappropriation and use of plaintiff’s confidential and proprietary data because Delaware’s trade secret statute “occupies the filed” and preempts claims for common law unjust enrichment. Continue Reading Spam Trap Evading Plaintiff Falls into Statutory Preemption Trap under Delaware Trade Secret Act
50 State Desktop Reference
What Businesses Need to Know About Non-Competes and Trade Secrets Law, 2020-2021 Edition
Seyfarth’s Trade Secrets, Computer Fraud & Non-Competes practice group is pleased to provide the 2020-2021 edition of our 50 State Desktop Reference, which surveys the most-asked questions related to restrictive covenants and trade secrets in all 50 states, including the recent updates in non-compete law in Virginia, California, Oregon, Maine, Rhode Island, Maryland, the District of Columbia, and New Hampshire.
For the company executive, in-house counsel, or HR professional, we hope this guide will provide a starting point to answer your questions about restrictive covenants and protecting your company’s most valuable and confidential assets.
In a move aligned with California’s view of non-competes, the District of Columbia (subject to congressional oversight) will soon impose a complete ban on any employment covenant that restricts employment elsewhere at any time, even restrictions forbidding simultaneous employment somewhere else. On January 11, 2021, Mayor Muriel Bowser signed the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), which will soon become law unless Congress issues a joint resolution disapproving the Act within 30 days of receipt of the Act. The projected date for the Act to become law is March 19, 2021. Then, in all likelihood, the Act will go into effect in the fall of 2021 once the DC Council tees up a fiscal impact statement and funding for the Act after the next budget cycle. Continue Reading District of Columbia’s Sweeping Ban on Non-Competes
Seyfarth partner Erik Weibust was recently named Co-Chair of the Trade Secret Committee for the Boston Patent Law Association (BPLA), Boston’s premier intellectual property organization for attorneys. This follows on the heels of Erik’s recent appointment as Chair of the American Intellectual Property Law Association (AIPLA) Trade Secret Committee.
The goal of the BPLA is to provide educational programs and a forum for the interchange of ideas and information concerning intellectual property (IP) including patent, trademark, trade secret, and copyright laws. Through a volunteer Board of Governors and its various committees, the BPLA organizes and hosts educational seminars, social events, and other programs. The Association promotes public understanding and appreciation for IP through education of the judicial, executive, and legislative branches of government by providing amicus briefs, regulatory comments, and feedback to policymakers.
Find more information about the BPLA Trade Secret Committee at https://www.bpla.org/.
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific
In the first installment of the 2021 Trade Secrets Webinar Series, Seyfarth attorneys will review noteworthy legislation, cases, and other 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 will provide predictions for what to watch for in 2021.
Seyfarth attorneys Michael Wexler, Robert Milligan, and Joshua Salinas will address the following topics:
- Significant new legislation on non-compete and other restrictive covenants and related court decisions that may impact their enforcement
- Discussion of legislative and regulatory efforts to narrow use of non-competes and how companies and the likelihood and impact of potential federal legislation under the Biden administration
- The Defend Trade Secrets Act and tips for navigating the law and an overview of what we know now that it’s been in effect for more than 4 years
- Recent significant trade secret misappropriation decisions concerning damages, fees, and pleading
- Recent computer fraud cases, including Van Buren v. United States, and criminal prosecutions for trade secret misappropriation and discussion of lessons learned
- Best practices for updating and structuring agreements and policies to adequately protect company assets and trade secrets, including addressing the challenge for multi-state employers of an increasing divergence of state laws
If you have any questions, please contact Colleen Vest at email@example.com and reference this event.
*CLE Credit for this webinar is approved in the following states: CA, IL, NJ and NY. CLE Credit is pending for GA, TX and VA. Credit will be applied for, but cannot be guaranteed, in all other eligible jurisdictions. Please note that in order to receive full credit for attending each webinar, the registrant must be present for the entire session.
Seyfarth Trade Secrets partners Erik Weibust, Jeremy Cohen, and Scott Humphrey authored “The Broker Protocol Celebrates Its Sweet Sixteen,” an article in Wealth Management. The article focuses on factors and questions that should be considered by business and legal decision-makers when thinking of joining or leaving the Broker Protocol, including:
- What are the short term and long term business goals and objectives?
- Understanding that the Broker Protocol is not “industry standard” and has no impact on Non-Protocol Members.
- Leaving the Broker Protocol does not mean your customer information automatically becomes confidential.
- Remembering that there are still requirements and protections within the Broker Protocol that both protect a broker’s former firm and cover Advisors who are part of a team.
Read the full article on the Wealth Management website at https://www.wealthmanagement.com/business-planning/broker-protocol-celebrates-its-sweet-sixteen
2020 brought with it a bevy of new challenges for companies of all sizes in every industry, not the least of which was protecting trade secrets and confidential information in the face of newly remote workforces. 2021 brings with it new hope and the promise of a return to “normalcy”—whatever that may mean in this changed world. But companies must remain vigilant about protecting their trade secrets and confidential information. As we enter the new year, here are ten resolutions that companies should make—and keep—to accomplish that important goal in 2021 and beyond. Continue Reading Ten Trade Secret Resolutions to Keep for 2021 and Beyond
Many companies have enacted new remote working policies, plans, and procedures, often without much thought given to the protection of trade secrets and proprietary information. Indeed, in their haste to provide work-from-home resources and accessibility, some companies are apparently loosening their security standards to allow faster and more convenient access for employees. Apart from any internal threat, there are bad actors taking advantage of the current situation. Relaxed security make systems and information far more susceptible to hacking and other data breaches. Thoughtful companies will want remote policies that remind employees of their obligations to keep company information secret, maintaining rigorous authentication processes in place to prohibit unauthorized access to company data, prohibiting and restricting the use of unauthorized third party cloud storage sites, and utilizing appropriate software to protect company data.
Seyfarth Partner and Co-Chair of the Trade Secrets, Computer Fraud, and Non-Competes practice Robert Milligan moderated and other industry experts presented “Coronavirus & Remote Work Force: Best Practices for Protecting Trade Secrets and Confidential Information,” a California Lawyers Association webinar. This program touches on the importance of the protection of trade secrets and proprietary information as remote workspaces expand. The panel also provides best practices in keeping your work-from-home environment secure and less susceptible to hacking or data breaches.
More information and to access the webinar click here.
In an expansive recent ruling, the California Court of Appeal in Brown v. TGS Management Co., LLC reversed a judgment confirming an arbitration award, examining the arbitrator’s findings, and ultimately invalidating a confidentiality provisions in an employment agreement under Business and Professions Code section 16600 on the grounds that they operated as a “de facto noncompete provision” and were “void ab initio and unenforceable.” The court’s decision, upholding the state’s long-standing policy in favor of employee mobility, offered a harsh word of caution for employers that use overly broad confidentiality provisions and other restrictive covenants with their California employees. Continue Reading California Court of Appeal Extends the Reach of Section 16600 to Upset Arbitration Award Because of Alleged Overly Broad Confidentiality Provisions
As we previously reported, President-elect Biden has issued a “Plan for Strengthening Worker Organizing, Collective Bargaining, and Unions” on his website, and it includes a statement that his incoming administration purportedly plans to “work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets.” It is unclear what “narrowly defined category of trade secrets” this would encompass, but regardless such a ban would upend over 200 years of state law and would have major impacts across all industries, including the financial services industry. Although Registered Representatives are permitted to move between firms who are members of the Broker Protocol, non-competes are ubiquitous in the broader financial services industry, including with fund and asset managers.
Boston partner Erik Weibust was recently interviewed for an article in Ignites, a mutual fund trade publication owned by the Financial Times, entitled “Hello Biden, Goodbye Employee Noncompete Agreements?” The article (which is behind a paywall), includes the following insights based on Erik’s interview:
- Doing away with non-competes “would be a big change” for asset managers, says Erik Weibust, a partner in Seyfarth’s Trade Secrets, Computer Fraud & Non-Competes practice.
- Whether companies enforce non-compete provisions depends in part on the laws of the states in which they operate, Weibust says. And 47 states and the District of Columbia permit enforcement of the clauses.
- If shops could no longer use non-competes, employers might tap laws protecting trade secrets and confidential information to a greater degree, Seyfarth’s Weibust says.
- Trade secret violations can be difficult to prove, Weibust says. For example, an executive may know all the steps or approaches that didn’t work in creating an investment process or new product, but it’s hard to prove a negative. The rust-prevention product WD40, for instance, is named for the 40 attempts it took to get the product right, Weibust says.
- As with many other legislative and regulatory initiatives, the fate of non-competes may ride to some extent on the January runoff Senate elections in Georgia, Weibust says.