When a company buys the assets of another, can those assets include the right to enforce a non-compete agreement?
The Georgia Supreme Court recently ruled that if a defendant has returned all of the confidential information at issue, then a continuing injunction is not warranted.
It was five years ago this week (May 11, 2011, to be precise) that Georgia's new restrictive covenant statute went into effect. Prior to the effective date of the statute, Georgia was (surprisingly for many out-of-state lawyers and businesses) one of the hardest states in which to enforce a restrictive covenant. As the Georgia Supreme Court stated in a a self-deprecating manner in Fuller v. Kolb, "Ten Philadelphia lawyers could not draft an employer-employee restrictive covenant agreement that would pass muster under the recent rulings of this court." (No one knows why Justice Ingram selected Philadelphia as the home of the most astute lawyers in the country, but I'm sure that the lawyers in our Philadelphia office would whole-heartedly agree.) The Georgia Supreme Court made this comment in 1977, well before the case law on restrictive covenants proliferated and became difficult for all but the most experienced practitioners to navigate.
Trade secret practitioners often find ourselves having to explain what a trade secret is. The most common example (and one which I frequently use) is the Coca-Cola formula, as it can be easily used to illustrate each of the prongs of the trade secret test. That example can then dovetail into a description of the Joya Williams case from a decade ago, which is a good example of an effective internal investigation on the part of an employer protecting its trade secrets.
President Obama is expected to sign the Defend Trade Secrets Act, which passed with overwhelming, bipartisan support in the House and Senate in recent weeks (and about which we will have a lot more to say in the coming days). Now, his Administration is moving from one major arena in which companies protect their confidential information to the other: enforcement of non-compete restrictions. And in this instance, the Administration would seek to reduce the options available to American businesses, rather than expand them.
In recent years, the National Labor Relations Board has increased its scrutiny of various employer practices, including those of non-unionized employers. Among the areas of scrutiny have been non-disclosure of confidential information provisions, which the NLRB has ruled can be in violation of Section 7 of the National Labor Relations Act, specifically the provision that protects employees' rights to engage in concerted activities for the ...
Jawbone and Fitbit are competitors in the business of selling fitness trackers. As competitors will sometimes do, Fitbit hired a number of employees from Jawbone in 2015. And as competitors sometimes do, Jawbone brought a legal claim against Fitbit and its five former employees. Because Jawbone and Fitbit are California companies, the allegation was not that Fitbit and the departing employees conspired to violate non-compete restrictions. Rather ...
Three years ago, we addressed the question of why college football programs do not use non-compete restrictions to prevent coaches from moving to direct rivals. At the time, we mentioned the fact that Arkansas was a program that had utilized a non-compete restriction with its then-current coach, Bobby Petrino:
In fact, a notable example of a college coach who does indeed have a non-compete restriction - Arkansas' Bobby Petrino - establishes the limits ...
Why don't college football coaches have non-competes?