Archives: Unfair Competition

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Wisconsin Supreme Court Applies Non-Compete Law To Invalidate Anti-Poaching Covenant

On January 19, 2018, a divided Wisconsin Supreme Court held that an employee non-solicitation covenant was overly broad and unenforceable under state law. In the decision, entitled The Manitowoc Company, Inc. v. Lanning, Case No. 2015AP1530 (Wisc. Jan. 19, 2018), the Court confirmed Wisconsin Statute §103.465, which governs covenants not to compete, extends to agreements … Continue Reading

A Protocol On Life Support – Financial Industry Assesses The Aftermath Of Major Defections From Broker Recruitment Pact

In the fourth quarter of 2017, two major financial firms dropped out of an industry-wide Protocol for Broker Recruiting (the “Protocol”), an agreement designed to reduce litigation surrounding the movement of stockbrokers between competing firms. While those departures do not necessarily seal the fate of the Protocol, they do portend an increase in litigation to … Continue Reading

Consider This – Minnesota Court Of Appeals Again Requires Proof Of Additional Consideration For Non-Compete Agreements For Existing Employees

In October and November of this past year, we wrote about two Minnesota court decisions – Mid-America Business Systems v. Sanderson et al., Case No. 17-3876 (Dist. Minn. Oct. 6, 2017) and Safety Center, Inc. v. Stier, Case No. A17-0360 (Minn. App., Nov. 6, 2017) — that addressed the adequacy of consideration that is provided … Continue Reading

The Trend Continues: New Non-Compete Bills Introduced In Pennsylvania, New Hampshire and Vermont

In the final month of 2017 we discussed efforts by the Massachusetts and New Jersey legislatures to limit the use of employment non-compete agreements. By the start of 2018, the spike in activity had become a trend, with Pennsylvania, New Hampshire and Vermont introducing non-compete legislation of their own. In an article posted on our … Continue Reading

Federal Court Interprets Florida and Pennsylvania Law To Endorse Protection Of Salon Services Company’s Customer Relationships And Specialized Information

In states that permit the enforcement of non-compete and other restrictive covenant agreements against former employees, companies must still demonstrate that the restrictions are designed to protect a legitimate business interest, and not to simply avoid ordinary competition. In Osborne Assocs. v. Cangemi, Case No. 3:17-cv-1135-J-34MCR (M.D.Fla. Nov. 14, 2017), the federal court for the … Continue Reading

Minnesota Court Of Appeals Reaffirms That A Non-Compete Must Be Part Of A Job Offer To A Prospective Employee

Last month, this Blog highlighted a Minnesota decision evaluating the consideration required for non-compete agreements entered into after the commencement of employment.  As that decision held, such agreements must be supported by valuable consideration over and above continued employment. This month, in Safety Center, Inc. v. Stier, Case No. A17-0360 (Minn. App., Nov. 6, 2017), the … Continue Reading

Clear as Mud: Illinois Courts Continue to Grapple With The “Adequacy” Of Consideration for Non-Compete Agreements

It is axiomatic that a contract requires consideration to be binding. Ordinarily, courts only inquire into the existence, but not the “adequacy,” of consideration.  Illinois courts, however, also scrutinize the adequacy of consideration when it comes to determining whether restrictive covenant agreements qualify as an enforceable contract.  Absent adequate consideration for the restrictive covenant, there … Continue Reading

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

Continued Employment Isn’t Always Sufficient – Minnesota Requires Additional Consideration For Non-Compete With Current Employee

The Minnesota federal district court recently refused to enforce a non-compete agreement, in part, because the employer failed to establish that the agreement was supported by valuable consideration.  The decision, issued on October 6, 2017 in Mid-America Business Systems, v. Sanderson et. al., Case No. 17-3876, serves as an important reminder that, in Minnesota, there … Continue Reading

Virginia Uniform Trade Secrets Act Prohibits Improper Acquisition of Trade Secrets, Regardless of Subsequent Use

Misappropriation of trade secrets claims can sometimes be difficult to sustain. While evidence of the taking of a trade secret may be available, evidence of its subsequent use may not.  In Integrated Global Services, Inc. v. Michael Mayo, Case No. 3:17cv563, by decision issued on September 13, 2017, the federal court for the Eastern District of … 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

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

Use Of Personal Cloud-Based Document Accounts Requires New Strategies By Employers

Whether Google Docs, Dropbox, or some other file sharing system, employees, especially millennials and other digital natives, are increasingly likely to set up personal cloud-based document sharing and storage accounts for work purposes, usually with well-meaning intentions, such as convenience and flexibility. Sometimes this is done with explicit company approval, sometimes it is done with … Continue Reading

Cases are easier to start than they are to finish: California Court awards $180,000 in sanctions for meritless trade secret misappropriation lawsuit brought in bad faith

The California Court of Appeal has upheld an award of monetary sanctions against a company that brought a lawsuit against its competitor that the court found was meritless and intended to stifle competition. Cypress Semiconductor Corp. v. Maxim Integrated Products, Inc., H038555 (Apr. 28, 2015). Cypress sued Maxim for trade secret misappropriation, alleging Maxim was attempting … Continue Reading

Company Pays For Taking Short Cuts to Start New Business

A New Jersey state court judge has allowed a $10 million jury verdict to stand in favor of biotech firm GenScript USA in its trade secret and employee piracy claims against competitor, Genewiz, Inc. In October 2014, the jury had entered a multi-million dollar verdict in GenScript’s favor following a six-week trial. The jury found … 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

CA Court Concludes Contract, Common Law Claims not Preempted by Trade Secrets Act

The Court of Appeal for California’s Fourth Appellate District recently confirmed that the California Uniform Trade Secrets Act (CUTSA), a broad statute intended to be the last word in trade secret misappropriation cases, does not preclude separate but related common law claims, so long as these claims are not based entirely on the trade secret … 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

Georgia Supreme Court Rejects Inevitable Disclosure Doctrine

The inevitable disclosure doctrine is a common law doctrine that has been used by some courts to prevent a former employee from working for a competitor, even in the absence of a non-compete, because the former employee’s new job duties would inevitably require him to rely upon, use or disclose his former employer’s trade secrets.  This … Continue Reading

Unfair Competition Claim Based on Copyright Infringement Preempted by Copyright Act

A federal court in California has held that a state law claim that a competitor engaged in unfair competition by creating infringing work after hiring former employees who stole proprietary information is preempted by the federal Copyright Act. Metabyte, Inc. v. NVidia Corp., et al., Case No. 12-0044 SC (N.D. Cal. April 22, 2013. Metabyte employed individuals to develop … Continue Reading

Plaintiff in Dispute over LinkedIn Account gets “Zero” Damages

Plaintiff pro se Linda Eagle, the former president of banking education company Edcomm, Inc. ended up empty handed even though she prevailed on the merits of her claims of invasion of privacy by misappropriation of identity in her federal lawsuit filed over the alleged hijacking of her LinkedIn account by her former employer following the termination of her employment. … Continue Reading

Another New York Federal Court Narrowly Construes the Federal Computer Fraud and Abuse Act

When an executive search firm bought the goodwill and other assets of a similar firm and learned that the individual sellers took client lists and diverted business in violation of their non-compete agreements, it terminated the sellers’ employment and sued them and other third-party defendants for violating the Computer Fraud and Abuse Act (“CFAA”) as well … Continue Reading
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