Recent Blog Posts
- Non-Competes Continue to Face Political Headwinds Legislative efforts to limit or ban the use of non-compete provisions in employment agreements have proliferated in the early months of 2018.
Perhaps most eye-catching was legislation (titled the “Workforce Mobility Act”) introduced in the U.S. Senate in late April 2018 that would prohibit employers from enforcing or threatening to enforce non-compete agreements with employees and require employers to post prominently a notice that such agreements are illegal. Co-sponsored by Democratic Senators Chris Murphy (CT), Elizabeth Warren (MA) and Ron Wyden... More
- Legitimate Business Interests: The Touchstone of Non-Competes A little-noticed decision from earlier this year rendered by the Supreme Court of New York, Westchester County, demonstrates how enforcement of post-employment restrictive covenants will often boil down to a single question: does the restriction protect a legitimate business interest of the employer?
In Cindy Hoffman, D.O., P.C. v. Raftopol, plaintiff applied for a preliminary injunction against its former employee, a physician’s assistant, who began working for a competitor in technical violation of her past employment non-compete restriction which barred her... More
- Mile High Non-Compete Law: Colorado Court of Appeals Determines Enforceability of Liquidated Damages Clause in Physician Non-Compete Agreement The Colorado Court of Appeals, in Crocker v. Greater Colorado Anesthesia, P.C., recently examined several unique enforceability considerations with respect to a physician non-compete agreement. Of particular interest was the Court’s treatment of a liquidated damages provision in the agreement. Pursuant to a Colorado statute (8-2-113(3), C.R.S. 2017), the Court held that the provision was unenforceable because the liquidated damages were not reasonably related to the injury actually suffered.
Michael Crocker, a former physician-shareholder at Greater Colorado Anesthesia (Old GCA), signed... More
- Non-Compete Laws: Illinois Guide Published with Thomson Reuters Practical Law We just published an article with Thomson Reuters Practical Law discussing non-compete agreements between employers and employees for private employers in Illinois. With Thomson Reuters Practical Law’s permission, we have attached it here.... More
- Antitrust Action Against No-Poaching Agreements: Obama Policy to Be Continued by the Trump Administration On October 20, 2016—just about three weeks before the presidential election won by Donald Trump—the Department of Justice and the Federal Trade Commission issued a remarkable document, entitled “Antitrust Guidance for Human Resources Professionals,” which outlined an aggressive policy promising to investigate and punish employers, and even individual Human Resources employees, who enter into unlawful agreements concerning recruitment or retention of employees. As stated in that document, “[a]n agreement among competing employers to limit or fix the terms of employment... More
- Judge and Jury Clear Financial Firm of Poaching and Trade Secrets Claims Financial analytics firm Novantas, Inc. and two individual defendants closed out 2017 with a victory, securing the dismissal of claims by rival First Manhattan Consulting Group LLC (“First Manhattan Consulting Group”) , which accused them of competing unfairly by poaching First Manhattan Consulting Group’s employees in order to steal its trade secrets. The result demonstrates the need for plaintiffs in such cases to be able to prove with specificity which trade secrets were taken or threatened by the defendants’ conduct.
- Long Strange Trip Through Court System Continues in Goldman Code Theft Case In an order dated April 20, 2017, New York’s Court of Appeals agreed to hear Sergey Aleynikov’s appeal of his conviction under an arcane New York criminal statute.
Aleynikov is a former Goldman Sachs computer programmer, arrested in July 2009 and accused of stealing computer source code from the bank. Originally, a federal jury found him guilty of violating both the National Stolen Property Act and the Economic Espionage Act, but that verdict was overturned by the Second Circuit in April 2012... More
- Going All the Way: SDNY Jury Awards $14.5 Million in Trade Secrets Lawsuit
It is rare that a trade secret / restrictive covenant lawsuit makes it all the way to trial, much less a jury verdict. The passage of time, accumulating legal expenses, bad facts, and/or the risk of losing at trial all can conspire to sap litigants of the desire to take their cases to the finish line. Settlements and withdrawals of claims abound. Sometimes, however, the parties dig in and roll the dice in court, as recently occurred in a case... More
- White House Call to Action Could Spur More States, Including New York, to Act Against Non-Competes Political winds disfavoring non-compete agreements for low wage and rank-and-file workers continue to blow, and appear to be picking up speed.
On October 25, 2016, the White House took the unusual step of issuing a “Call to Action” to states regarding non-compete agreements, as part of the President’s initiative to stoke competition across the economy. Calling non-competes an “institutional factor that has the potential to hold back wages and entrepreneurship,” the Call to Action seeks to reduce the misuse of non-compete... More
- New York Attorney General Targets Non-Competes for Rank-and-File Workers This summer, New York Attorney General Eric T. Schneiderman has reached agreements with a number of companies curtailing their use of non-competition agreements with respect to non-executive and low-wage employees in New York. The issue appears to have caught the attention of Mr. Schneiderman, who stated recently that “restricting rank-and-file workers from being able to find other jobs is unjust and inappropriate” and “workers should be able to change jobs without fear of being sued.”
For example, on August 4, 2016,... More