Main Menu

Non-Compete and Trade Secrets Blog

The rules of professional conduct in the majority of jurisdictions make restrictive covenants between attorneys unenforceable. But what about in-house attorneys? At least one court in Colorado recently enforced a noncompete, enjoining an in-house attorney from accepting a new position with a competitor.

Late last year, Pennsylvania legislators introduced House Bill 1938, the “Freedom to Work Act” (the “Act”), an outright ban on “covenant[s] not to compete” in Pennsylvania. Under the Act, “a covenant not to compete is illegal, unenforceable and void as matter of law.” 

Last week, the Attorney General of Illinois filed suit against Check Into Cash, LLC, alleging that the payday lender required its low-wage customer service employees to agree to illegal non-compete agreements in violation of Illinois law.  The lawsuit is another example of the Attorney General’s fight against illegal non-competes and marks the first time the Attorney General has brought a claim under the Illinois Freedom to Work Act, 820 ILCS 90/1.

Did an employee violate the terms of her non-solicitation agreement when she used LinkedIn to advertise her new employer’s services? A Minnesota decision helps define the parameters of prohibited solicitation in the social media context.

Courts are increasingly asked to examine the scope and enforceability of non-solicitation agreements in the age of social networking. With employees using LinkedIn and other websites to stay in touch with current and former colleagues, a recent Illinois appellate court decision helps shed some light on the types of communications that may or may not constitute a breach of a valid non-solicitation agreement.

The Eighth Circuit recently decided a case under Iowa law determining that a noncompete with an independent contractor was unenforceable. The noncompete was not per se unenforceable but ultimately determined unenforceable following a fact-intensive analysis finding it to be unreasonable.

Employers who operate in a multi-state environment that seek to enforce restrictive covenants across state lines face numerous challenges in attempting to comply with the law of various jurisdictions and protecting their interests. Choice-of-law and choice-of-forum issues often times prove to be outcome determinative.

Companies need to follow best recruiting and hiring practices when bringing on a new employee, particularly from a competitor, to ensure that the employee is not taking with them trade secrets from the prior employer, otherwise a third-party misappropriation lawsuit may be around the corner resulting in expensive and time-consuming litigation.

Continued misappropriation claims that originate prior to enactment are not permitted under the UTSA but the DTSA is silent on the issue. Nevertheless, a growing body of case law is holding that such continued misappropriation claims are viable under the DTSA pointing out a key difference litigators need to be aware of in the statutes that otherwise share many similarities.

The Defend Trade Secrets Act (“DTSA”) allow employers to provide their workforce with notice of the DTSA whistleblower immunities by “cross-referencing a policy document” but the statute gives no guidance on what the “policy document” is to say, how it should be “cross-referenced,” or if the “policy document” should be provided to employees? This post endeavors to provide answers to these questions.

Recent Posts

Category List

Archives

Back to Page