Last week, the United States Department of Justice (“DOJ”) Antitrust Division suffered back-to-back trial defeats in its recent enforcement initiative to use the Sherman Act to stop employers from using allegedly anticompetitive tactics to suppress wages and employee mobility. In the first case, the DOJ’s first ever criminal wage-fixing prosecution ended with not guilty verdicts. In the second case, a national healthcare provider and its former CEO were acquitted on charges involving allegedly illegal “no-poach” agreements.
Continue Reading DOJ Antitrust Division Suffers Back-to-Back Trial Defeats in Wage Fixing and “No Poach” Cases

In the first program in the 2022 Trade Secrets Webinar Series, Seyfarth attorneys Michael Wexler, Robert Milligan, and James Yu reviewed 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 provided predictions for what to
Continue Reading Webinar Recap! 2021 Trade Secrets & Non-Competes Year in Review

What You Need to Know about the Recent Cases and Developments in Trade Secrets, Restrictive Covenants, and Computer Fraud

Thursday, January 27, 2022
2:00 p.m. to 3:00 p.m. Eastern
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In the first installment of the 2022 Trade Secrets Webinar Series,
Continue Reading Upcoming Webinar! 2021 Trade Secrets & Non-Competes Year in Review

Thursday, December 16, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
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In this installment of our 2021 Trade Secrets Webinar Series, our team will focus on new legislation and the enforcement of non-competes. Any company that seeks to use non-compete and
Continue Reading Upcoming Webinar! Overview of Non-Compete Legislation and Enforcement Issues from 2021

The Department of Justice recently announced that it had charged one of the largest independent oncology groups in the country, Florida Cancer Specialists & Research Institute LLC (“FCS”), with antitrust violations under the Sherman Act, an incredibly rare antitrust action against a health care provider and the first in 25 years. The DOJ’s investigation into criminal antitrust violations amongst oncology providers has led to the defendant’s agreement to pay a whopping $100M fine in exchange for the DOJ’s agreement to defer prosecution on the antitrust charges until 2023.
Continue Reading First, Do No Harm: Oncology Group Agrees to $100M Fine Following Criminal Antitrust Investigation

On April 13, 2020, the Department of Justice’s Antitrust Division and the Federal Trade Commission’s Bureau of Competition released a joint statement and press release regarding “competition in labor markets” and potential agency actions in the face of the COVID-19 crisis. While the agencies’ joint statement appears to be focused on collusion between employers entering into horizontal “no-hire” or “no-poach” agreements, employers in certain industries affected by the crisis should also exercise reasonable care in enforcing vertical restrictive covenants, including non-competition and non-solicitation agreements.
Continue Reading The DOJ and FTC Issue Joint Statement on Competition in Labor Markets in Light of COVID-19: What Effect, If Any, Does This Have on Non-Competes?

Continuing our annual tradition, we have compiled our top developments and headlines for 2019 & 2020 in trade secret, non-compete, and computer fraud law. Here’s what you need to know to keep abreast of the ever-changing law in this area.

1. Another Year, Another Attempt in Congress to Ban Non-Competes Nationwide

Senators Chris Murphy (D-Conn.) and Todd Young (R-Ind.) introduced legislation in 2019 entitled the Workforce Mobility Act (“WMA”). The WMA seeks to ban non-compete agreements outside of the sale of a business or dissolution of a partnership.

Not only would the WMA abolish covenants not to compete nationwide, outside of the extremely narrow exceptions highlighted above, but it would also provide the Department of Labor (DOL) and Federal Trade Commission (FTC) with broad enforcement power. If enacted, the legislation would empower the FTC and DOL to enforce the ban through fines on employers who either fail to notify employees that non-compete agreements are illegal or who require employees to sign covenants not to compete. Additionally, the WMA establishes a private right of action for all employees allegedly aggrieved by a violation of the WMA.

The WMA contains a carve out for parties to enter into an agreement to protect trade secrets. As currently drafted, the WMA does not abrogate the scope of protections provided by the Defend Trade Secrets Act.

Presently, there are no generally applicable federal restrictions on non-compete agreements, and enacting such a law would have to pass Constitutional muster. We expect to see continued activity at the federal legislative level to attempt to ban or limit the use of non-competes.

2. New State Legislation Regarding Restrictive Covenants


Continue Reading Top 10 Developments and Headlines in Trade Secret, Non-Compete, and Computer Fraud Law for 2019 & 2020

Within the last five months, the two executive arms responsible for enforcing antitrust laws—the US Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”)—held public workshops to examine the effect of non-compete clauses in employment contracts on the labor market. The DOJ held its workshop on September 23, 2019, while the FTC recently held its own at the top of the year, on January 9, 2020. The purpose of the FTC workshop was “to examine whether there is a sufficient legal basis and empirical economic support to promulgate a Commission Rule that would restrict the use of non-compete clauses in employer-employee employment contracts.”

Why the FTC now wants to regulate in the employment space is not readily apparent apart from attempting to capitalize on a low-hanging fruit populist issue concerning the overreporting of some companies allegedly using non-competes with low-wage workers.
Continue Reading A Solution in Search of a Problem? FTC Hosts Workshop to Consider Authority to Abolish Non-Competes

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?

Seyfarth Synopsis:  Criminal prosecution of “no-poaching/no-hire” agreements appears imminent.  Employers should investigate their hiring and compensation practices to ensure compliance with recent antitrust pronouncements.

Background

In October 2016, the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) under the Obama Administration issued a joint Antitrust Guidance for Human Resource Professionals (“HR Guidance,” available here).  Among other things, the HR Guidance announced that so-called “naked” agreements among employers not to recruit employees or not to compete on employee compensation would be considered per se violations of the antitrust laws and prosecuted criminally. 
Continue Reading DOJ to Announce Criminal Enforcement Actions for “No-Poach” Agreements