Archives: Non-Solicitation

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Georgia Court of Appeals Confirms Non-Solicitation of Employees Covenant Need Not Have Geographic or Material Contact Language

As previously noted in Jackson Lewis’ Non-Compete & Trade Secrets Report, Georgia adopted legislation governing restrictive covenant agreements entered into on or after May 11, 2011. This law, however, does not address employee non-solicitation (i.e., anti-pirating) covenants, leaving courts to apply common law to such restrictions.  Georgia common law can be confusing and even contradictory … Continue Reading

Referral Sources Can Be A Protectable Interest Under Florida Law

In Florida, non-competition and other restrictive covenant agreements are enforceable to the extent they are tailored to protect a legitimate business interest. On September 14, 2017, the Florida Supreme Court held that a company’s relationships with business referral sources may constitute a protectable business interest – White v. Mederi Caretenders Visiting Services of Southeast Fla., … Continue Reading

Kansas Decision Highlights The Perils Of Overreach In Restrictive Covenant Agreements

In a recent decision examining Kansas non-compete law, the United States District Court for the District of Kansas partially granted a company’s motion to enjoin its former employee’s violations of the non-compete and customer non-solicitation provisions of his employment agreement. The decision, in the matter of Servi Tech, Inc. v. Olson, highlights a number of key … 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

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

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

Wisconsin Court Finds Anti-Poaching Agreements to be Unenforceable

For all the court decisions out there interpreting non-competition restrictions and customer or client restrictions, case law regarding non-solicitation of employees restrictions can be a little hard to find. At the link below is a report about a new decision from the Wisconsin Court of Appeals — written by our colleague in Madison, Sharon Mollman Elliott … 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

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

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

Hawaii Bans Non-Compete and Non-Solicit Clauses in High-Tech Employment

Jackson Lewis Hawaii attorneys Andrew L. Pepper and Wayne S. Yoshigai have a post on the Jackson Lewis website about a new development in Hawaii non-compete law.  They write as follows: Departing from the state’s normally pro-employer laws and judicial attitudes regarding non-compete covenants, a new law bars high-tech companies in Hawaii from requiring their employees to … Continue Reading

Alabama Amends Non-Compete Statute

The Alabama legislature recently passed changes to Section 8-1-1 of the Code of Alabama, the provision which contains the state’s non-compete statute. Governor Bentley signed the new version of the statute and it will become effective January 1, 2016. While the new version does not drastically change the landscape of non-competes, there are several changes which … Continue Reading

Alabama Signals Possible Expansion of Exemption for “Professionals” from Non-Compete Restrictions

Alabama does not enforce non-solicitation and non-compete agreements against professionals as that term is traditionally defined – to include, by example, physicians, lawyers, and accountants.  In G.L.S. & Associates, Inc. v. Rogers, 2014 Ala. Civ. App. Lexis 87 (2014), the Alabama Court of Civil Appeals recently opened up a possible expansion as to what qualifies as a … Continue Reading

Claims in Pennsylvania Lawsuit Alleging En Masse Defection of Employees as “Sabotage” Survive Dismissal

A U.S. District Judge in the Eastern District of Pennsylvania has allowed several claims to proceed to trial following a motion for summary judgment by defendants in Ozburn-Hessey Logistics, LLC v. 721 Logistics, LLC, et al, No. 12-0864 (April 4, 2014). The allegations in the case go beyond the typical defection of an employee or two to … Continue Reading

Pennsylvania Court Upholds Choice of Law Provision in Non-Solicitation Case Involving California Employee

In another example of out-of-state employers utilizing choice of forum and choice of law provisions to bind California employees to restrictive covenants, the Pennsylvania Superior Court recently held that a Pennsylvania choice of law and forum clause was enforceable as against a California resident. The case, Synthes USA Sales, LLC v. Harrison, involved a sales … Continue Reading

Tennessee Continues its Trend of Enforcing Non-Competes

In a recent Tennessee case, Fidelity Brokerage Services LLC v. Melissa Clemens, No. 2:13-CV-239 (E.D. Tenn., Nov. 4, 2013), the Court entered a preliminary injunction prohibiting a former employee from soliciting customers or prospective customers she served while working for Fidelity, from soliciting Fidelity’s employees, and from using Fidelity’s confidential information.  As  we previously stated regarding the Dill v. Continental decision, the Fidelity case … Continue Reading

LinkedIn Notification Not Competition, Mass Court Holds

The use of LinkedIn to notify professional contacts of a change in employment did not constitute competition. according to a recent Massachusetts ruling. In KNF&T v. Muller, No. 13-3676-BLS1 (October 24, 2013), the Massachusetts Superior Court denied a request for a preliminary injunction where an employer alleged that a former employee violated her non-competition agreement by, among … Continue Reading

First Circuit Defines “Solicitation” Broadly

The First Circuit Court of Appeals issued its most significant decision to date on non-solicitation provisions in restrictive covenants by upholding a preliminary injunction in Corporate Technologies, Inc. v. Harnett, No. 13-1706 (August 23, 2013). The court affirmed a decision from the District of Massachusetts granting a preliminary injunction to an employer whose former employee used … Continue Reading

North Dakota Supreme Court Upholds Judgment for Competing in Breach of Employment Contract while Still Employed

The North Dakota Supreme Court upheld a judgment finding two employees of SolarBee, Inc., a North Dakota corporation that manufactures solar-powered water circulators, liable for a total of $621,800 in damages for breaching a non-compete agreement while still employed.  The Court’s decision in SolarBee, Inc. v. Walker, No. 2012015 (June 24, 2013), is a reminder … Continue Reading

Bill in New Jersey Legislature Would Invalidate Restrictive Covenants

An article recently posted on the Jackson Lewis website describes a bill introduced in the New Jersey State Assembly that would invalidate non-compete, non-disclosure, and non-solicitation agreements for former employees who are eligible for unemployment benefits.  A similar proposal is under consideration in Maryland. We will continue to monitor this topic.… Continue Reading

The Georgia Restrictive Covenants Act – Two Years Later

As previously reported in a legal alert issued by Jackson Lewis on May 12, 2011, Georgia Governor Nathan Deal signed the Georgia Restrictive Covenants Act into law almost two years ago, on May 11, 2011.  Since that time, many employers have required employees to sign new covenants that comply with the law. The Georgia Restrictive … Continue Reading

Nebraska Court Addresses Meaning of “Solicitation” in Non-Compete Agreement

A Federal Court in Nebraska issued a preliminary injunction enforcing an employee non-compete agreement in a case that explains, for the first time, what a Nebraska court may consider “solicitation.”  The case, Farm Credit Services of America v. Opp, No. 8:12-cv-382 (D. Neb. 2013), involved a crop insurance salesman, Opp, who signed a non-compete agreement … Continue Reading

You Fired Me, So Now I Can Compete – True or False?

We have often been asked: if an employer fires an employee, can a non-compete or non-solicitation agreement be enforced?  Some federal district courts interpreting New York law had said “no.”  A recent decision from the Second Circuit Court of Appeals, Hyde v. KLS Professional Advisors Group, LLC, 2012 U.S. App. LEXIS 21111 (2nd Cir. October 12, … Continue Reading
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