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A recent Louisiana non-compete case involving two appellate decisions addresses three significant issues in non-compete litigation: 1) whether a former employee’s referral of customers to a new employer violated the employee’s non-solicitation of customer covenant; 2) the consequences of violating the covenant and court injunction; and 3) the appropriate standard of proof for contempt proceedings.

Summary of decision. Five years …
Continue Reading Referring Former Employer’s Customers To New Employer Held Violation Of Injunction, Resulting In Finding Of Criminal Contempt

Is new consideration required for a valid covenant not to compete presented to an employee at the inception of their employment after they sign their offer letter? 

Under the majority approach, recognized in many states continued employment is sufficient consideration for a valid non-compete agreement.  However, a minority of jurisdictions, will not enforce a non-compete agreement offered for signature after …
Continue Reading You’ve Already Signed Your Offer Letter– Can You Still Be Subject to a Non-Compete Agreement Signed at the Inception of Employment Without New Consideration? Pennsylvania Supreme Court Says Yes

By Robert Milligan and Grace Chuchla

In a recent opinion, Creech, Inc. v. Brown, the Kentucky Court of Appeals both affirmed the ability of Kentucky courts to modify overly broad non-competition agreements in the employment context and laid out a six-part framework that trial courts may follow when analyzing the reasonableness and enforceability of non-competition agreements.

The court…
Continue Reading Kentucky Appellate Court Affirms Authority of Kentucky Courts to Modify Overly Broad Non-Competition Agreements in the Employment Context and Sets Forth “Guiding Principles” for Future Non-Compete Cases

A business entity changing its form, but not its operations, will want to protect non-competition and confidentiality agreements with its employees from expiring as a result of the transaction. Because those covenants usually are viewed as non-assignable personal service contracts, they may be unenforceable by the surviving entity, absent each employee’s express consent, if the covenants are seen as pertaining solely…

Continue Reading A Business Entity That Changes Its Corporate Structure Risks Expiration Of Its Employees’ Covenants-Not-To-Compete And Confidentiality Agreements

A recent decision by the Texas Supreme Court makes it easier for employers to enforce restrictive covenants in Texas. Employers often seek to obtain these types of contracts with key employees to prevent them from going to work for competitors or to leave to start competing businesses. The enforceability of such contracts is typically governed by state law, resulting in…

Continue Reading Texas Supreme Court Allows Stock Options as Consideration for Non-Compete Agreements