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Non-Compete and Trade Secrets Blog

It has now been over two years since the Defend Trade Secrets Act went into effect. How have courts been applying the controversial civil seizure remedy?

Since October 2016 and the Call to Action by the White House, eight (8) states have enacted some type of restrictive covenant reform. This post discusses those efforts and provides an analysis of each new state law that we have seen.

State legislatures across the country have been active in recent years proposing and enacting legislation that impacts employers’ use of restrictive covenants. In a series of three posts, we will examine how this movement started, where it has gone, and where it is going.

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.

The 8th 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.

When the Defend Trade Secret Act (“DTSA”) was enacted much was written about its unique remedy provision – the ex parte seizure of property. There were numerous questions about how federal courts would interpret and apply the provision. A federal court in California recently gave the first answer.

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