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Non-Compete and Trade Secrets Blog

Posts from July 2010.

In a state that is otherwise generally recognized as being “employer friendly,” Georgia law has long been known for its “unfriendliness” towards non-competes and other post-employment restrictive covenants. However, a radical shift in that law is on the horizon – and the fate of the sea change actually resides in the hands of Georgia voters.

State information security laws that protect personal information are not going away. If anything, they are becoming more commonplace and stringent.

Businesses that lack a social networking policy or don't train their employees on the do’s and don’ts of social networking may have a critical security gap in the protection of their trade secrets, and may be exposing themselves to harassment, hostile work environment, defamation and numerous other legal claims.

Since the addition of civil remedies in 1994, the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”), has evolved into a potentially powerful claim in the departing employee context. The likelihood of success on CFAA claims against departing employees, however, varies by jurisdiction. Recently, numerous courts have debated, and issued divergent rulings, on the enforceability of CFAA claims against departing employees. The debate often focuses on the statute’s “without authorization” or “in excess of one’s authorization” requirement.

Many employers with offices or employees located in multiple states use the same non-compete/confidentiality agreement in each state in which they do business. Typically, the form of the non-compete/confidentiality agreement originated in the employer’s home state, and the employer went on to use this same agreement wherever the employer does business. However, these employers may find out too late that a non-compete/confidentiality agreement enforceable in their home state may not be enforceable in another state.

The New Jersey Supreme Court's decision in Stengart v. Loving Care was widely anticipated because it is common for employers to review their former employees' workplace computers to determine whether trade secrets have been taken, restrictive covenants have been breached, or whether statutes like the Computer Fraud & Abuse Act have been violated. The extent to which the decision will implicate these issues remains to be seen, but seems to be minimal.

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