federal restrictive covenant legislationLast week, in connection with a House Oversight hearing, Representative Carolyn Maloney (D-N.Y.) introduced legislation to restrict confidentiality provisions from covering claims of discrimination, harassment, and retaliation. The “Accountability for Workplace Misconduct Act,” H.R. 8146, appears to be a federal effort to expedite the state-level trend to exempt discrimination, harassment, and retaliation information from confidentiality restrictions.

Over the last decade, lawmakers at the state and federal level have introduced and passed legislation designed to limit the reach of confidentiality provisions in certain circumstances. Those modifications include:
Continue Reading House Introduces Legislation Restricting Confidentiality Provisions in Settlement Agreements

On November 1, 2018, the California Court of Appeal, Fourth Appellate District affirmed a trial court’s ruling in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. et al., No. D071924, 2018 WL 5669154 (Cal. App. 2018), which (1) invalidated the plaintiff’s non-solicitation of employees provision in its Confidentiality and Non-Disclosure Agreements (CNDAs), (2) enjoined AMN from enforcing or attempting to enforce the employee non-solicitation provision in its CNDA with any of its former employees, and (3) awarded $169,000 in reasonable attorneys’ fees to defendants for plaintiff’s use of the provision.

The case is a significant decision which may impact some employers’ continued use of employee non-solicitation provisions with their California employees, at least in certain industries. There is now a split in California authorities and the issue is likely ripe for California Supreme Court guidance.

AMN and Aya are competitors in the business of staffing temporary healthcare professionals, namely providing “travel nurses” to medical care facilities across the country.  When former employees, named as individual defendants in the action and who worked as travel nurse recruiters in California, left AMN for Aya, AMN brought suit against Aya and the former employees, asserting 11 causes of action, including for breach of contract and trade secret misappropriation.
Continue Reading California Appellate Panel Affirms Injunction Blocking Use of Employee Non-Solicitation Provision in Dispute Between Travel Nurse Providers

shutterstock_224796712By: Ofer Lion, Douglas M. Mancino, and Christian Canas

Unwelcome news for charities concerned with donor confidentiality

A recent court ruling1 upheld the position of the California Attorney General (AG) requiring that charities located or operating in California provide a copy of their unredacted Form 990 Schedule B, including the names, addresses and contribution amounts for all
Continue Reading Court Affirms California Attorney General’s Demand for Confidential Donor List

A recent case in Massachusetts confirms that taking affirmative steps to protect the confidentiality of trade secrets is absolutely critical to litigating a claim for misappropriation. In C.R.T.R. v. Lao, Plymouth Superior Court Docket No. 2011-962 (Dec. 30, 2013), the plaintiff sued a former independent contractor for, among other things, misappropriation of the company’s trade secrets. The defendant
Continue Reading Massachusetts Court Confirms That When It Comes To Trade Secrets, Confidentiality Is Key

Soda cans

Shortly before leaving the employ of Swanel Beverage, Inc. (a manufacturer of soft drinks, juice products, and energy beverages), Bodemer — Swanel’s national sales and marketing manager who “was involved with almost every facet of Swanel’s business” — incorporated Innovative Beverage, Inc.  Right after Bodemer resigned from Swanel, Innovative commenced operations as a competitor.  Then, he and Innovative filed a
Continue Reading Indiana Federal Court Holds That A Confidentiality Agreement Without Any Limitations Violates Indiana Law And That A Suit For Misappropriation Cannot Be Brought By A Plaintiff Who Uses A Trade Secret With Permission But Does Not Own It

The Ohio 12th District Court of Appeals recently uphelda lower court’s injunction against two former employees and their new employer in light of defendants’ apparent breach of duty of loyalty, misappropriation of trade secrets, and tortious interference with business relations. DK Prods., Inc. v. Miller, Case No. CA2008-05-060, 2009 WL 243089 (Ohio Ct. App. 12 Dist. Feb. 2

Continue Reading Ohio Appellate Court Upholds Entry of Temporary Injunction