In-house attorneys often wear multiple hats when performing work for private companies. Some of their work clearly falls under the provision of legal services, while others can be less clear quasi-business roles. And when those in-house lawyers who perform non-legal work are asked to sign a non-compete agreement in connection with their employment, questions can arise both as to the enforceability of those agreements and whether an attorney violates the rules of professional conduct by signing such an agreement as we have previously discussed.
Continue Reading Another Decision Addressing Non-Competes for In-House Counsel

For the first time in 15 years, the Supreme Judicial Court (“SJC”), Massachusetts’ highest court, issued a decision analyzing the enforceability of non-solicitation covenants, the distinction between such covenants in the context of the sale of a business versus employment, and equitable tolling of restrictive covenants. As set forth below, this decision serves as an important reminder to businesses who impose restrictive covenants governed by Massachusetts law.

Factual Background

While the factual background of the case is long and twisty, only a few key details are necessary to rehash here. The defendant Matthew McGovern (“McGovern”) entered into a restrictive covenants agreement with his former co-shareholders of the Prime Motor Group (“Prime”), in exchange for plaintiffs’ agreement to buy out McGovern’s minority share in Prime with no discount. The agreement, which was made a year after McGovern had been terminated as an employee and as part of a resolution of the parties’ dispute concerning McGovern’s alleged violation of an earlier restrictive covenants agreement, prohibited McGovern from hiring, soliciting, or encouraging Prime employees to leave Prime for 18 months. The agreement contained no tolling provision, but provided that plaintiffs would be entitled to injunctive relief if McGovern breached, without needing to prove irreparable harm.  
Continue Reading Massachusetts’ High Court Pumps the Brakes on Equitable Tolling of Restrictive Covenant

On Tuesday, February 26, 2019, at 12 p.m. to 2:00 p.m. Eastern, Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is presenting a webinar for myLawCLE, a partner of the Federal Bar Association. The “Latest Developments in Trade Secrets Law and Non-Compete and Non-Solicitation Agreements” webinar covers some of

Throughout 2018, Seyfarth Shaw’s dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant issues facing clients today in this important and ever-changing area of law. The series consisted of seven webinars:

  1. 2017 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law
  2. Protecting Confidential Information and Client Relationships in the Financial Services Industry
  3. The Anatomy of a Trade Secret Audit
  4. Protecting Trade Secrets from Cyber and Other Threats
  5. 2018 Massachusetts Non-Compete and Trade Secrets Reform
  6. Protecting Trade Secrets Abroad and Enforcing Rights Abroad and in the U.S.
  7. Criminal Trade Secret Theft: What You Need to Know

As a conclusion to this well-received 2018 webinar series, we compiled a list of key takeaway points for each program, which are listed below. For those clients who missed any of the programs in this year’s series, recordings of the webinars are available on the blog, or you may click on the title of each available webinar below for the online recording. Seyfarth Trade Secrets, Computer Fraud & Non-Compete attorneys are happy to discuss presenting similar presentations to your company for CLE credit. Seyfarth will continue its trade secrets webinar programming in 2019, and we will release the 2019 trade secrets webinar series topics in the coming weeks.
Continue Reading 2018 Trade Secrets and Non-Competes Webinar Series Year in Review

On Wednesday, November 28, 2018, at 1:00 to 2:30 p.m. Eastern, Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is presenting a Strafford live webinar. The “Drafting Enforceable Non-compete and Non-Solicitation Agreements: Compliance with New State Statutes and Case Law” webinar panel will discuss recent legislative and case law

What Businesses Need to Know About Non-Compete and Trade Secrets Law

Seyfarth’s Trade Secrets, Computer Fraud, and Non-Competes Practice Group is pleased to provide the 2018-2019 edition of our one-stop 50 State Desktop Reference, which surveys the most-asked questions related to the use of restrictive covenants and intellectual capital protection in all 50 states, including

Earlier this month, the Texarkana Court of Appeals took the extraordinary measure of affirming an award of plaintiff attorney’s fees against a defendant for willful and malicious misappropriation of trade secrets in an amount that was ultimately more than 50 times higher than the plaintiff’s actual awarded damages.

Samuel D. Orbison worked for an oil and gas company, Ma-Tex Rope Company, Inc., for five years and signed an employment agreement containing a non-competition agreement, a non-disclosure agreement, and a non-solicitation agreement. During his tenure with Ma-Tex, Orbison became the coordinator of Ma-Tex’s recertification department until he resigned and began working for its competitor, American Pipe Inspections, Inc. (API), in the same position he had filled with Ma-Tex. When Ma-Tex learned that Orbison had begun soliciting recertification work from Ma-Tex’s customers, it sued Orbison and API for, among other claims, breach of contract and misappropriation of trade secrets.
Continue Reading In Trade Secret Misappropriation Case, Texas Court of Appeals Affirms Attorney’s Fees Award Approaching $220,000 where Actual Damages Were $4,000

On Monday, January 29th, Faraday & Future Inc., the electric car manufacturer founded by Chinese billionaire and entrepreneur Jia Yueting, filed a one-count Defend Trade Secrets Act complaint against Evelozcity, Inc., an electric car manufacturer that was recently created by Faraday & Future’s former CFO and CTO.  The case is Faraday & Future Inc. v. Evelozcity Inc., 18-cv-00737, U.S. District Court, Central District of California (Western Division).
Continue Reading Start-Up Car Companies Clash in Electrifying Trade Secrets Case

An employment agreement covenant prohibiting solicitation of co-employees, but not indicating what solicitations were prohibited, has been held to be invalid.

Status of the case.  A multi-count complaint filed in the D.C. District Court charged two former employees of the plaintiff with breaches of contract and tort violations.  The defendants moved to dismiss.   The court

Notwithstanding a forum-selection provision in the parties’ consulting agreement designating the Northern District of Georgia as the place for litigating non-competition and non-solicitation covenants disputes, a Georgia federal judge transferred covenant violation litigation to the Middle District of Florida. Also, the judge explained why he thought that an arbitration clause was unenforceable, but he said