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In an unprecedented move, the FTC has issued a Notice of Proposed Rulemaking that would render unenforceable all non-compete agreements currently in existence (with limited exception), and would bar employers from entering into any contract that that could conceivably prevent a worker from seeking or accepting certain employment, or operating certain businesses, after the conclusion of the worker’s employment with…

Continue Reading Policy Matters Podcast: FTC’s Crackdown on Non-Competes Through Agency Rulemaking
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The FTC’s proposed rule banning non-competes with employees and workers has now been published in the Federal Register.

The rule would provide that noncompete clauses are an unfair method of competition and as a result, the rule would ban employers from entering noncompete clauses with their employees and workers (defined by the FTC to include independent contractors and others). The rule would require employers to rescind existing noncompete clauses with workers and actively inform their employees that the contracts are no longer in effect. The rule would include a limited exception for non-compete clauses between the seller and buyer of a business. This exception would only be available where the party restricted by the non-compete clause is an owner, member, or partner holding at least a 25% ownership interest in a business entity.…

Continue Reading Comments on FTC’s Proposed Rule Banning Non-Competes With Employees and Workers Now Due March 20th 

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On January 4, 2023, the Dallas Court of Appeals in Texas affirmed a summary judgment in a trade secrets physician staffing case that stands as a warning to practitioners regarding (1) what constitutes sufficient damages evidence to survive summary judgment, and (2) whether something can be considered on appeal that has been sealed or subject to a confidentiality agreement.…

Continue Reading Texas Court of Appeals Affirms Summary Judgment in Physician Staffing Case Citing Lack of Damages Evidence

Thursday, January 12, 2023
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In the first installment of the 2023 Trade Secrets & Non-Competes Webinar Series, our team will focus on the new Federal Trade Commission’s (“FTC”) proposed rule banning the use of…

Continue Reading Upcoming Webinar! FTC Proposes Rule Banning Use of Non-Competes. Now What?
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The District of Massachusetts recently held that garden leave payments, whereby a former employee subject to a restrictive covenant is paid by the former employer for the duration of the restrictive period, do not constitute “wages” under the Massachusetts Wage Act.…

Continue Reading Federal Court Determines that Garden Leave Payments Under Massachusetts Non-Compete Law Are Not Wages, Limiting Former Employees’ Leverage Under Wage Act

trade secrets litigation

Many restrictive covenant agreements rely on various abbreviations to streamline the contractual language, including most notably the use of “Company” as a stand-in for the employer’s name. Additionally, these agreements often state that they inure to the benefit of the employer’s parent, subsidiaries, and other affiliates. However, a recent case in federal court demonstrates the importance of carefully defining terms to best protect the employer’s legitimate business interests.…

Continue Reading “What’s in a Name?” A Shortened Restrictive Covenant Duration, Perhaps

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Cases don’t try very often. Doubly so in trade secret/non-compete litigation. So many of these disputes get resolved at the injunctive relief phase of the proceeding that, when one goes the distance, it is almost always worth peeking under the hood.

In MWK Recruiting, Inc. v. Jowers, No. 1:18-cv-444-RP (W.D. Tex.), a federal district court judge recently entered a judgment for $3.6 million—before fees and costs—against a former external law firm recruiter. The facts are not complex. A recruiter left his employer and joined a competitor. But before the recruiter left his former employer, he began using his personal email for candidate submissions and allegedly laundered six lateral candidates through the founder of his new employer. His former employer sued him and alleged that he misappropriated trade secrets and breached non-compete and non-solicitation covenants in his employment agreement. At trial, the district judge found in the plaintiff/employer’s favor on both claims and entered a $3.6 million damages award, with about $500,000 awarded under the misappropriation claim and $3 million under the breach of contract claim.…

Continue Reading Lessons from a Staffing Misappropriation and Non-Compete Trial

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In the sixth installment of our 2022 Trade Secrets Webinar Series, Seyfarth attorneys Dawn Mertineit and Robyn Marsh discussed tips and best practices for multijurisdictional businesses when it comes to restrictive covenants, including non-compete and non-solicitation agreements.

As a conclusion to this webinar, we compiled a summary of takeaways:

  • There is no “one-size-fits-all” way to prepare a restrictive covenants
… Continue Reading Webinar Recap! How Multijurisdictional Businesses Should Approach Non-Competes

webinar recap - texas trade secrets and non-competesIn the fifth installment of our 2022 Trade Secrets Webinar Series, Seyfarth attorneys Jesse Coleman, Matt Simmons, and Kevin Green discussed legal developments and trends in Texas trade secret and non-compete law and how it is similar to and diverse from other jurisdictions.

As a conclusion to this webinar, we compiled a summary of takeaways:

  • A restrictive covenant is

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Continue Reading Webinar Recap! How and Why Texas is Different When it Comes to Trade Secrets and Non-Competes

federal non-compete ban legislationOn September 1, 2022, Representative Mike Garcia (CA-25) introduced H.R. 8755, titled The Restoring Workers’ Rights Act (the “RWRA”), which would effectively ban non-compete agreements for non-exempt (low-to-mid wage) employees nationwide. If enacted, the RWRA would follow similar legislation in states such as Illinois, Colorado, Washington, and others that have imposed statutory income minimums that must be met in order for employers to bind employees to post-employment restrictive covenants.
Continue Reading California Representative Mike Garcia Introduces Federal Bill Barring Non-Compete Agreements