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The US Department of Justice (DOJ) recently announced the indictment by a grand jury charging four owners/managers of home health care agencies in Maine with participating in a conspiracy to suppress wages and restrict the job mobility of personal support specialist (PSS) workers in violation of Section 1 of the federal Sherman Act. According to the indictment, the owners/managers agreed to fix the rates paid to these workers and also agreed not to hire each other’s workers. The DOJ warned in a press release that “[t]his indictment is the first in this ongoing investigation into wage fixing and worker allocation schemes in the PSS industry,” and part of a larger “ongoing federal antitrust investigation into wage fixing and worker allocation in the home health care industry.” Continue Reading Alleged “No-Poach” Agreement in Health Care Industry Results in Another Criminal Antitrust Prosecution

restricive-covenenat-legislation-trendsOver the past 10–15 years, we have seen an explosion of legislative activity related to restrictive covenants. This activity is happening not only in state legislatures but on the federal level as well. While each proposal is different, we’ve certainly seen trends emerge, including required notice provisions, fee shifting, and choice of law and venue requirements.

One of the most prevalent trends is the move towards banning non-competes (and sometimes, other restrictive covenants) for so-called “low-wage workers.” To date, 10 states have implemented a low-wage ban of sorts: Illinois, Maryland, Maine, Massachusetts, Oregon, Nevada, New Hampshire, Rhode Island, Virginia, and Washington.[1] Continue Reading More States Eye Low-Wage Non-Compete Bans

In what may seem to be a surprising series of events, given the state’s infamous hostility to restrictive covenants, a California appellate panel recently affirmed a Los Angeles Superior Court judgment effectively enjoining Netflix from soliciting certain employees subject to specific fixed-term employment agreements with Fox. More specifically, the panel—applying reasoning similar to the California Supreme Court’s in Ixchel Pharma, LLC v. Biogen, Inc.—upheld the trial court’s granting of summary adjudication in favor of Twentieth Century Fox Film Corporation and Fox 21, Inc. (collectively, “Fox”) on their claim under Business and Professions Code sections 17200, et seq. against Netflix Inc. (“Netflix”) and corresponding injunction in an unpublished but closely followed decision.

In affirming the judgment, the panel expressly rejected Netflix’s contention that the injunction, which prohibits Netflix, “individually … and/or in concert with others,” from “solicit[ing] employees who are subject to [f]ixed-[t]erm [e]mployment [a]greements with [Fox] or induc[ing] such employees to breach their valid [f]ixed-[t]erm [e]mployment [a]greements with [Fox],” constituted “an invalid restraint on employee mobility” under California public policy, Business and Professions Code section 16600, and other statutes concerning personal services contracts. The panel acknowledged each of these arguments and underlying public policy concerns, but ultimately found that they were not supported by the facts at hand, particularly in light of countervailing policies “favoring the stability and predictability of fixed-term employment relationships.” The panel also observed that the injunction had been carefully limited, and narrowly drawn by the trial court to curb wrongful conduct by Netflix without impeding the ability of individual employees to independently seek out new employment. Continue Reading California Court of Appeal Affirms Injunction Barring Netflix From Poaching Fox Executives, Citing Unfair Competition

This blog post is the author’s opinion and is for educational and informational purposes only. It provides general information and a general understanding of the law, but does not provide specific legal advice. Please feel free to reach out to a Seyfarth Trade Secrets attorney if you’d like to discuss your particular situation.

Before Georgia enacted a constitutional amendment in 2011 to allow the enforcement of reasonable restrictive covenants, Georgia was a popular venue for companies and individuals to avoid non-competes and non-solicits. A recent personal jurisdiction decision in which the Georgia Supreme Court affirmed that a foreign corporation’s registration to do business in Georgia amounts to an implicit consent to general personal jurisdiction raises the question of whether Georgia will once again become a popular forum to try to void restrictive covenant agreements—at least for agreements executed before May 11, 2011.

To understand why, we’ll begin with a brief overview of Georgia’s history as a hostile venue to restrictive covenants and trends in personal jurisdiction decisions before returning to Cooper Tire’s facts and potential impact on restrictive covenants. Continue Reading Does Georgia Decision on Personal Jurisdiction Present an Invitation to Forum Shop For Non-Compete Disputes?

Seyfarth partner and Trade Secrets, Computer Fraud & Non-Competes co-chair Robert Milligan was recently interviewed for an article in Law360, entitled “Defend Trade Secrets Act: 5 Years Later, Here’s What We Know.” The article provides an overview of the DTSA, the goals the DTSA, and what has changed and what has remained the same in the five years since the DTSA’s passage.

The full article can be read on the Law360 website.

 

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.

Request a PDF Copy of the Guide Here

The much-ballyhooed legal battle over trade secrets concerning self-driving automobile technology involving Uber took its latest (and perhaps final) turn last week, when engineer Anthony Levandowski was sentenced to 18 months in prison and ordered to pay over $700,000 in restitution.

Embroiled in the middle of a billion-dollar dispute between tech giants, Levandowski had previously pled guilty to the single count of trade secret theft and was already facing a $179 million judgment awarded to his former tech employer. Naturally, the length of prison sentence and the amount of restitution had been of particular interest to the business and legal communities to see what kind of message would be sent by US District Judge William Aslup. But interestingly, it was another (non-traditional) aspect of the sentence that perhaps sent the clearest and most impactful message to tech companies and their employees: the requirement that Levandowski, whom the judge described as a “good person” and a “brilliant man”, must give speeches to the public entitled “Why I Went to Federal Prison.” Continue Reading Self-Driving to Federal Prison: The Trade Secret Theft Saga of Anthony Levandowski Continues

The Massachusetts Superior Court recently held in Now Business Intelligence, Inc. v. Donahue that a temporary reassignment during a business slowdown, consisting of the addition of certain non-billable duties, does not constitute a material change invalidating a non-compete agreement. The dispute centered on Now Business Intelligence, Inc.’s (“NBI”) ability to hold its former employee, Sean Donahue (“Donahue”), liable for breach of his covenant not to compete. Continue Reading Massachusetts Superior Court Axes an Attempt to Expand the Scope of the Seminal Non-Compete Law Concerning Material Change in Employment

In a case following a familiar trade-secret set of facts, on April 28, 2020, the Texas First District Court of Appeals in Houston reversed the trial court’s grant of a motion to dismiss under the Texas Citizens Participation Act (“TCPA”) in National Signs, Inc. v. John Graff. In doing so, the First District joined the growing number of Texas Appellate Courts that have held that the TCPA, in its Pre-September 2019 amended state, does not protect private communications that are centered on competition or preparing to compete against the plaintiff. Continue Reading Houston First Circuit Court of Appeals Joins the Growing Trend by Holding that the Pre-Amendment TCPA Does Not Protect Certain Competitive Behavior

Late last spring we reported on the second published decision out of the District of Massachusetts citing the Massachusetts Noncompetition Agreement Act (“MNCA”), NuVasive, Inc. v. Day. On April 8, 2020, the First Circuit issued a decision on the defendant’s appeal, upholding the lower court’s ruling. While the First Circuit’s decision does not directly analyze an agreement that is subject to the MNCA, it is still instructive for out-of-state employers with personnel who may be subject to that law. Continue Reading The First Circuit Weighs in on the Applicability of Massachusetts’ Non-Compete Law