The COVID-19 remote work era is now in its tenth month, and employees continue to work away from the physical office, without in-person supervision, and perhaps outside of the company network. During this time, many employees have been adopting new practices for performing their jobs remotely and these practices can create new and increased threats to the protection of company trade secrets.
The recruitment and onboarding process can be fast-paced as employers and recruits go back and forth on salary, title, benefits, and more. Sometimes an impending deadline pushes the parties to move quickly, such as the start date for a big project for which the new recruit will be a key part of the team. In their anxiousness to just get started after an important recruit agrees to join the company, business leaders may be tempted to let the new hire start work while the parties “work out the details” of an employment agreement – potentially including the exact terms of restrictive covenants such as non-compete and non-solicit provisions. However, the seemingly reasonable decision to give an employee time to review a proposed agreement, and perhaps discuss it with personal counsel before signing, could leave you with an unenforceable agreement according to a recent decision by the Pennsylvania Supreme Court. The recent decision in Rullex Co., LLC v. Tel-Stream, Inc., emphasized that, in order for a restrictive covenant to be enforceable based on a job offer (and without any additional consideration), the parties must have agreed on the covenant’s provisions at the time employment commences.
Can an employer enforce a noncompete against a former employee terminated during a reduction-in-force? Employer concerns of unfair competition are reemerging now that recently terminated employees are finding employment (some with competitors) in an improving economy.
When it comes to physician employment agreements, non-compete provisions can be controversial and tricky. The use of these agreements is nonetheless increasing and evolving as hospitals and other groups try to protect their investments in successful medical practices, especially those that they helped launch and nurture. After assuming the risks and costs of building a medical practice, they obviously do not want to see employed doctors move their practices (and patients) to a competitor.
Maine, New Hampshire, and Rhode Island all passed legislation in recent weeks limiting employer’s ability to enter noncompetition agreements with low-wage employees in those states.
Following the White House’s Call to Action and responding to some high-profile cases, Maryland became the latest state to ban noncompetition agreements with low-wage workers.
As of January 1, 2020, Oregon employers with noncompetition agreements will be required to clear another administrative hurdle to ensure their noncompetition agreements remain enforceable. The new law requires, as a condition to enforcing a noncompetition agreement, that the employer provide the terminated employee with a signed, written copy of the noncompetition agreement within 30 days after their termination.
Can a former employer’s alleged misconduct defeat a request for injunctive relief against former employees when those departing workers take confidential information and clients to another employer? A federal appeals court recently addressed this question and decided not to apply the “unclean hands” doctrine against the employer in a trade secrets case, clearing the way for the injunction.
The recent California Court of Appeal ruling in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., creates some doubt about the continued viability of employee non-solicitation covenants. However, this case is distinguishable and appears limited to its facts, where the particular employee's profession was the business of recruiting temporary travel nurses and accordingly the court court found that the non-recruiting restriction was an unlawful restraint of trade or profession.
One month into Massachusetts’ new non-competition law, employers throughout the Commonwealth are learning what many predicted from the beginning—there are a lot more questions than answers. As Fisher Phillips previously reported, the new law adds several technical and substantive requirements that must be met in order to enforce a non-competition agreement. Today we spotlight a few issues employers must now grapple with.