Trade Secrets & Employee Mobility

Employers seeking to enjoin a departing employee in Massachusetts from using or disclosing their trade secrets face a higher evidentiary bar than what previously seemed available. In Daikin Applied Americas Inc. v. Russo, SJC-13881 (Mass. Oct. 14, 2026), the Supreme Judicial Court (SJC) held that a plaintiff who shows a likelihood of success on a trade secret misappropriation claim is not entitled to a presumption of irreparable harm, and trade secret plaintiffs must prove irreparable harm like any other plaintiff.

Last month, the United States District Court for the Northern District of New York granted an employer’s application for a preliminary injunction based on the former employee’s breach of his noncompete.  In granting the preliminary injunction, the court in Plug Power, Inc. v. Shokrian, No. 1:26-cv-01277 (N.D.N.Y. Jul. 24, 2026), held that the employee’s access to confidential information, combined with other acts evidencing an intention to compete, was sufficient to establish irreparable harm without evidence that the former employee used or disclosed any of the employer’s confidential information.  The court further ruled that the employer established a likelihood of success on the merits even though the employee was involuntarily terminated because the termination was for cause. 

Louisiana and Maryland have recently enacted restrictions on noncompete agreements with certain individuals and professions that will go into effect later this calendar year, and Iowa also passed legislation that recently went into effect.  Here’s what employers need to know.

In a recent opinion, the Delaware Court of Chancery refused to enforce or blue-pencil restrictive covenants imposed after a national restoration company acquired a local restoration business.  Although it is an unpublished opinion, the case presents another example of the Delaware Court of Chancery refusing to blue pencil an overbroad restrictive covenant agreement. 

As we previously reported, Virginia recently enacted Senate Bill 170 (“the Act”), which takes effect July 1, 2026, and expands the Commonwealth’s existing restrictions on noncompete agreements by rendering such agreements void and unenforceable when an employer terminates an employee without cause. On May 14, 2026, by way of Senate Bill 128 (“SB 128” or the “Amendment”), Virginia broadened the Act to prohibit noncompetes for “health care professionals, ” effective July 1, 2026.

Restrictive covenants entered in connection with the sale of a business occupy a different place than ordinary employment noncompetes. In a sale transaction, the buyer is not simply trying to limit a former employee’s next job. The buyer is paying for goodwill, customer relationships, confidential information, and the seller’s promise not to immediately undermine the value of what was sold.

Tennessee has just adopted a new framework for noncompete agreements. On May 7, 2026, Tennessee Governor Bill Lee signed into law House Bill 1034, as amended. The new statute goes into effect on July 1, 2026, and will apply to any agreement entered into, renewed or amended on or after that date. Employers with workers in Tennessee should immediately familiarize themselves with the new requirements. The new law:

On April 15, 2026, Governor Janet T. Mills signed into law “An Act Relating to Noncompete Agreements Between Employers and Health Care Practitioners,” L.D. 2200 (the “Amendments”).  The Amendments significantly restrict noncompetes for health care practitioners in the State of Maine.  The Amendments apply to all noncompete agreements entered into, or renewed on or after, the Amendments’ effective date of July 13, 2026 (the “Effective Date”).

On March 24, 2026, Governor Spencer J. Cox signed the Healthcare Worker Post-Employment Amendments, House Bill 270 (the “Amendments”) into law. Taking effect on May 6, 2026, the Amendments eliminate, with limited exceptions, post-employment noncompetes in the State of Utah for healthcare workers.

Thomson Reuters Practical Law has released the 2026 update to “Garden Leave Provisions in Employment Agreements,” co-authored by Peter A. Steinmeyer and Lauri F. Rasnick, Members of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Chicago and New York offices, respectively.