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Non-Compete and Trade Secrets Blog

Posts tagged Restrictive Covenants.

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 recently proposed federal Employee Mobility Act of 2018 would effectively create a nationwide ban on non-compete agreements. Introduced in both the Senate and the House of Representatives, Senate Bill 2782/House Bill 5631 is the next step in a multi-year effort by a group of Senators and Representatives, and previously White House personnel under President Obama, who argue that employee non-competes (a) unduly inhibit employees’ economic opportunities, and (b) harm the economy by limiting employee mobility. This proposal comes as multiple state legislatures likewise have been considering and, in some cases, enacting legislation relating to employee restrictive covenants. 

Employers must fight the urge to utilize overbroad non-compete clauses with their high level employees. The Northern District of Illinois reminds employers of the consequences that can result from the use of such overbroad covenants.

Non-compete agreements are an essential instrument in many employers’ toolkits. But what happens to these agreements when an employee is laid off or let go due to economic downturn? In a small subset of states, such conditions could render non-compete agreements unenforceable.

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.

Last week, the Attorney General of Illinois filed suit against Check Into Cash, LLC, alleging that the payday lender required its low-wage customer service employees to agree to illegal non-compete agreements in violation of Illinois law.  The lawsuit is another example of the Attorney General’s fight against illegal non-competes and marks the first time the Attorney General has brought a claim under the Illinois Freedom to Work Act, 820 ILCS 90/1.

Did an employee violate the terms of her non-solicitation agreement when she used LinkedIn to advertise her new employer’s services? A Minnesota decision helps define the parameters of prohibited solicitation in the social media context.

Courts are increasingly asked to examine the scope and enforceability of non-solicitation agreements in the age of social networking. With employees using LinkedIn and other websites to stay in touch with current and former colleagues, a recent Illinois appellate court decision helps shed some light on the types of communications that may or may not constitute a breach of a valid non-solicitation agreement.

On Feb. 24, 2017, at the University of Denver, come join Fisher Phillips attorneys and a prominent of practitioners and state and federal judges at the first ever conference on the new Defend Trade Secrets Acts (DTSA), which became effective in mid-2016.

Forum-selection clauses can have a drastic impact on the outcome of non-compete litigation where there can be significant differences between states, and the Alabama Supreme Court just weighed in.

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