Archives: Non-Compete

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Nevada’s All-New Non-Compete Statute

Once again, Nevada has re-written the landscape the law regarding enforcement of post-employment non-competition agreements.  Please see the article posted on our website, written by Elayna J. Youchah and Joshua A. Sliker of our Las Vegas office.  They analyze Assembly Bill 276, amending Chapter 613 of the Nevada Revised Statutes, signed into law by Governor Brian … Continue Reading

Nebraska Court Enforces Forum Selection Clause

Nebraska’s legal history on the enforceability of non-compete agreements is usually a surprise for employers who view Nebraska as pro-business.  Nebraska courts routinely invalidate employee non-compete agreements that venture beyond restricting the employee from doing business with and soliciting customers with whom that employee did business and had personal contact. If there is a non-compete component … Continue Reading

Texas Pre-Suit Discovery – Obligations Under Unusual Procedure Clarified

Although most employers are very familiar with the usual discovery process of litigation, they may not be as familiar with the Texas Rules of Civil Procedure’s Rule 202, which concerns pre-suit depositions. Rule 202 can be used, for example, by an employer who wants to learn more about a former employee’s activities before commencing a … Continue Reading

What Does it Mean to “Modify” an Unenforceable Non-Competition Covenant Under Georgia’s Restrictive Covenants Act?

               Although Georgia’s Restrictive Covenants Act has been on the books since the spring of 2011, no judge has decided the exact scope of Georgia courts’ blue-penciling abilities – until now.  In a case of first impression, Judge Thrash of the United States District Court for the Northern District of Georgia, in LifeBrite Laboratories, LLC … Continue Reading

Selective Enforcement Not A Viable Defense to Non-Competition Agreements Under Ohio Law

Employers sometimes worry whether seeking to enforce their non-competes in some circumstances but not others might preclude enforcement altogether in the future.  Not so, says one court.  Applying Ohio law, the United States District Court for the Western District of Tennessee, in GCA Services v. ParCou, held in a discovery ruling that information regarding an … Continue Reading

Federal District Court In Missouri Raises Doubts Concerning Whether At-Will Employment Is Consideration For A Non-Compete Agreement

The United States District Court for the Eastern District of Missouri, in Durrell v. Tech Electronics, Inc., 4:16-CV-01367 (E.D. Mo. Nov. 15, 2016), held that an at-will employee’s non-compete agreement may not be enforceable where the only form of consideration is the employee’s at-will employment status since an at-will employment relationship cannot constitute consideration. In … Continue Reading

White House Continues Attack on Non-Compete Agreements

The assault on non-compete agreements has continued in a significant way, as outlined in our web article, White House Continues Attack on Non-Compete Agreements.  The latest White House document, coupled with prior reports from the White House and Treasury Department, as well as actions initiated by the Attorney General of New York and the Attorney … Continue Reading

Non-Solicitation Agreement Enforced in Wisconsin

There are so many stories about restrictive covenants being unenforceable in Wisconsin that it is refreshing to see a case where a restrictive covenant is enforced – especially at the preliminary injunction stage.   This week, the U.S. District Court for the Eastern District of Wisconsin granted a preliminary injunction in favor of BMO Harris Bank, … Continue Reading

Applying Delaware Law, Federal Trial Court in Texas Determines that Restrictive Covenants in Incentive Stock Agreements Are Overbroad and Unenforceable as Written

The importance of drafting non-competition and other restrictive covenant agreements narrowly in terms of geography, duration and scope of activities to reasonably meet the employer’s legitimate business interests should not be underestimated. A recent decision from the Southern District of Texas illustrates the importance of narrowly crafting post-employment restrictions. In Cameron International Corporation v. Abbiss, … Continue Reading

Texas Court Reminds: Lost Sales Are Not Lost Profits

Proof of damages in restrictive covenant matters can be complicated.  In Rhymes v. Filter Resources, Inc., the Ninth Court of Appeals in Beaumont, Texas reminded parties that revenue and sales are not the same as lost profits, and expenses must be considered when developing a damage model. George Rhymes (“Rhymes”) was employed by Filter Resources (“Filter”) … Continue Reading

Illinois Statute Bars Non-Competes For Low-Wage Workers

Illinois has a new non-compete statute that bans the use of non-compete agreements with “low-wage” employees. Peter Bulmer in our Chicago office has written this article on the Jackson Lewis website analyzing the new law, which takes effect January 1, 2017, and explaining the context which led to its enactment:  Illinois Freedom to Work Act: One … Continue Reading

Groundhog Day for Massachusetts Non-Compete Reform

Once again, the Massachusetts legislature was unable to agree on non-compete reform legislation by the July 31, 2016, end of the current legislative session. The House and Senate had passed versions of non-compete reform that differed on key provisions. At the end of the session, however, the House and Senate failed to pass a compromise … Continue Reading

Utah Enacts New Laws Addressing Post-Employment Restrictions and Unauthorized Computer Use

Conrad S. Kee from our Salt Lake City office and Cliff Atlas, co-chair of the firm’s non-compete practice group have written on the firm’s website about two new important laws in Utah, the Post-Employment Restrictions Act and the Computer Abuse and Data Recovery Act.… Continue Reading

Florida Federal Court Raises the Bar on Irreparable Injury

 Businesses seeking injunctive relief to enforce non-competition agreements in Florida might be required to show the confidential information they seek to protect is neither unnecessary nor outdated, according to a recent ruling in Transunion Risk and Alternative Data Solutions, Inc. v. Challa, 2016 U.S. Dist. LEXIS 166346, Case No. 9:15-cv-91049 (S.D. Fla. March 23, 2016).  The … Continue Reading

Four Non-Compete and Confidentiality Agreement Issues to Watch in 2016

Jackson Lewis has prepared an end-of-the-year review of four non-compete and confidentiality issues to watch in 2016 on its website. Clifford R. Atlas, co-chair of the firm’s non-compete and unfair competition practice group, and attorney Puja Gupta from the firm’s Baltimore office, identify four developments to keep an eye on next year: 1. Enforceability of choice of … Continue Reading

Consideration Required to Bind Existing Employees to Noncompetes, Pennsylvania Supreme Court Holds

The Pennsylvania Supreme Court has ruled that a non-compete signed during the course of employment, without additional consideration, is not enforceable even though the agreement stated that the parties “intend to be legally bound.” Socko v. Mid-Atlantic Systems of CPA, Inc. Douglas G. Smith, Melissa L. Evans and David E. Renner from our Pittsburgh office … Continue Reading

Illinois Appellate Court Finds Non-Compete Restrictions Over-Reaching and Affirms Court Decision Not to Blue Pencil

A recent decision from an Illinois Appellate Court suggests that employers with non-compete agreements “built to scare” may end up with an unenforceable contact and even the loss of confidential information under Illinois law. AssuredPartners, Inc. v. Schmitt (October 27, 2015 1st Dist.) Illinois Courts continue to carefully scrutinize contracts containing post-employment restrictions over concerns … Continue Reading

Fifth Circuit Affirms Rejection of Texas Choice-of-Law as to Oklahoma-Based Employees for Non-Compete Provisions, But Allows Texas Law to Apply to Non-Solicitation Provisions

In a detailed, 26-page published decision in the matter of Cardoni v Prosperity Bank, No. 14-20682 (5th Cir. Oct. 29, 2015) the Fifth Circuit Court of Appeals took a deep look at choice of law provisions in restrictive covenants. The Appellate Court started out by noting that in addition to their well-known disagreements over boundaries and … Continue Reading

Continued Employment Ruled Adequate Consideration for Non-Compete in Hawaii

After surveying the law across the country, a federal judge has determined that Hawaii would likely follow the majority of states in holding that continued employment is adequate consideration for a non-compete under Hawaii law.  A full analysis of the decision is posted on the Jackson Lewis website: Continued Employment Adequate Consideration for Non-Compete Imposed Mid-Employment, … Continue Reading

Eighth Circuit Finds Non-Compete May be Assignable Under Arkansas Law; Reverses Dismissal of Breach of Fiduciary Duty and Conspiracy Claims Where Manager took Subordinates with him.

The Eight Circuit has concluded that the Arkansas Supreme Court would likely adopt the majority rule that a covenant not to compete can be assigned to the purchaser of a business. Stuart C. Irby Company, Inc. v. Tipton, No. 14-1970 and 14-2682 (8th Cir. Aug. 6, 2015) The appellate court reversed an across-the board win … Continue Reading

Some Clarity to What is Sufficient Consideration for Non-Competes in Illinois

Since the much-discussed Fifield case from the Illinois appellate court two years ago, all that could be said with confidence was that, unless someone was employed for at least two years after signing a restrictive covenant agreement, its enforceability was highly questionable. Practitioners in Illinois have been recommending that employers provide consideration in addition to … Continue Reading

Reminder From the 7th Circuit: Don’t Put the Cart Before the Horse (Establish your Legitimate Interest in Need of Protection Before you Complain About the Breach of a Non-Compete)

In the rush to the courthouse after an executive leaves, takes people with her, and opens a competing business, the spurned employer often relies on the promise that executive made—the noncompete agreement—and the undisputed breach of that promise and believes the court will provide a remedy. “Not so fast,” is the takeaway from the 7th … Continue Reading
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