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.
Nondisclosure agreements are not enough to fully protect the value of a company’s proprietary information. The $30 million dollar jury verdict in BladeRoom v. Facebook, et al. is not inconsequential, to be sure, but it represents only ten percent of the recovery that BladeRoom was seeking against Facebook and Emerson Electric.
Many defendants attempt to defend against claims of trade secret misappropriation by asserting that they never actually used or disclosed the information at issue. Based on a recent ruling by a federal district court in New York, however, that defense may sometimes be insufficient to defeat the claim. This ruling is the latest in a series of court decisions recognizing that merely acquiring a trade secret through improper means is enough to violate the Defend Trade Secrets Act.
In an age of high digital mobility in which a company’s most valuable competitive asset is often their digital playbook data, email enterprise vaults, anti-deletion programming and key stroke surveillance software are a must to protect a company’s most valuable trade secret information.
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.
Does your company have employees located in multiple jurisdictions across the United States? Are you concerned that your restrictive covenants are not enforceable in all of these jurisdictions? If so, you're not alone. Multistate employers need to consider the dangers of “one-size-fits-all” covenants. The Association of Corporate Counsel's Docket just published a detailed article addressing this very question. Click here to learn how to navigate the analysis required to ensure your covenants will hold up in a multistate environment.
One question that often arises in the trade secret practice is what information, if any, can be protectable as confidential information even if it does not qualify under state law as a trade secret. In other words, what is the value of having a non-disclosure of confidential information provision in an agreement? What does that type of provision do that statutory or common law trade secret protections don't already provide?
A recent case from the 6th Circuit ...
When employees resign to join a competitor, care should be taken to avoid common mistakes that may give rise to litigation. Here are some things to keep in mind.