On March 3, 2020, Massachusetts Premier Soccer LLC, doing business as Global Premier Soccer (“GPS”), filed a complaint in the US District Court for the District of Massachusetts, alleging that two of its former management-level employees engaged in a scheme to divert business away from GPS to a competitor, Surf Club. GPS asserts claims for false advertising and promotion under the Lanham Act, tortious interference with contractual relations and prospective economic advantage, breach of non-competition and non-solicitation agreements, civil conspiracy, unfair and deceptive practices under Massachusetts and South Carolina law, and common law unfair competition.
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As we previously covered, a group of 18 state attorneys general in July filed comments with the Federal Trade Commission (“FTC”), asking the FTC to incorporate labor concerns when reviewing corporate mergers and to use its enforcement powers under the Sherman Act to stop the use of non-compete, non-solicit, and no-poach agreements in many situations. Many of those same attorneys general recently sent another letter to the FTC, this time urging it to use its rulemaking authority “to bring an end to the abusive use of non-compete clauses in employment contracts.”

In the most recent letter, the attorneys general endorsed the arguments presented in a March 20, 2019, petition submitted to the FTC by various labor unions, public interest groups, and legal advocates, requesting that the FTC initiate rulemaking to classify abusive worker non-compete clauses as an unfair method of competition and per se illegal under the FTC Act for low wage workers or where the clause is not explicitly negotiated. As they did in their previous letter, the attorneys general contend that non-competes “deprive workers of the right to pursue their ambitions and can lock them into hostile or unsafe working environments.” The attorneys general also argue that the arguments in support of non-compete clauses are unpersuasive and that employers can use other “less draconian” ways to recoup their investment in job training, methods of business, and other intangibles. The attorneys general further argued that non-competes burden businesses seeking to hire new employees, which in turn inhibits innovation and drives up consumer costs by suppressing competition.
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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.
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By Bob Stevens and Dan Hart

For many in Alabama, the holiday season does not end until after the college football national championship game, which has featured one of the state’s two top college football programs (the Auburn University Tigers and the University of Alabama Crimson Tide) for each of the five past years. While

In Corporate Technologies, Inc. v. Harnett, et al., U.S. Court of Appeals for the First Circuit recently upheld the issuance of a preliminary injunction barring a former employee (Harnett) from doing business with his former employer’s (CTI) customers, even if the customers initiated the contact. 

CTI had employed Harnett as an account executive/salesman for

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.

Garrod, a salesman for more than 25 years in the field of elastomeric precision products (EPP), was terminated in mid-2012 after spending an aggregate of a dozen of those years working for manufacturers of EPP parts Fenner and a company acquired by Fenner.

He had signed both employers’ agreements containing non-compete and customer non-solicitation clauses–which

MPI, a Texas company, went to Kentucky and allegedly attempted to hire two Luvata employees, Foster and Meredith. Foster joined MPI soon thereafter. Over the course of the next few months while Meredith remained a Luvata employee, he and Foster allegedly spoke by phone repeatedly. In addition, prior to leaving Luvata for MPI, Meredith

On March 21, 2012, in the case of Pyro Spectaculars, Inc. et al. v. Souza, Case No. 12-CV-00299-GGH, Magistrate Judge Gregory G. Hollows of the USDC for the Eastern District of California (Sacramento Division), issued an order preliminarily enjoining a former Account Executive for a pyrotechnics company from soliciting the customers of his former

In Finkel v. Cashman Professional, Inc., et al., Case Nos. 54520, 55377, 2012 WL 669897 (Nev. March 1, 2012), the Supreme Court of Nevada addressed the validity of non-solicitation, non-competition, and non-disclosure covenants and the proper duration of a preliminary injunction prohibiting disclosure or use of trade secrets. The Nevada Supreme Court received the case