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Non-Compete and Trade Secrets Blog

Posts from October 2010.

A federal district court gave teeth to a ninety-day notice provision by enforcing a ninety-day non-compete that was triggered in the event the employee chose to resign without notice.

A recent Ohio Supreme Court case serves as a reminder that misconduct undertaken by departing employees can lead to more than just civil liability; it can lead to professional sanctions as well. Various professions ranging from medicine to financial services to engineering are governed by self imposed standards of conduct. As employees change jobs, they ought to think about more than civil liability as they consider what to do and more importantly, what not to do.

In a sobering reminder that online social media is changing the way the world does business, a federal court recently shot down an employer's trade secret claim based largely upon the availability of information via the internet. Does this mean that employers seeking trade secret status for customer lists and related information should throw up their hands and surrender? No. This case presents a textbook example of what not to do if an employer regards its client information as confidential.

In a suit filed by the ACLU, a court recently issued a protective order precluding a public school from enforcing confidentiality obligations against employees who disclose information in connection with “formal and informal discovery.” Would the court reach a similar result against private entities?

In non-compete or trade secret cases against former employees, it is sometimes difficult for the former employer to determine precisely who did what. Employers should consider including a claim for civil conspiracy in cases where they suspect two or more parties colluded to deprive the employer of its legal rights.

Employers and employees alike often ask how much consideration is required to support a non-compete. A recent case suggests that a Garden Leave clause -- a promise to pay the employee's salary for the duration of the non-compete -- is adequate.

There is no magic “formula” for achieving trade secret status for a customer list, but there are many different steps a company can take to improve its odds. Here are five.

Does your confidentiality and nonsolicitation agreement preclude departing employees from contacting your clients via LinkedIn and other social media? A little clarification can go a long way.

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