Trade Secrets & Employee Mobility

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists look back on the top trade secrets and non-compete stories of the year:

This year has been a rollercoaster for trade secrets and non-compete law. We’ve seen major legal battles at both the federal and state levels impacting employers across the nation.

In this episode, Epstein Becker Green attorneys Peter A. Steinmeyer, Daniel R. Levy, Katherine G. Rigby, A. Millie Warner, and Erik W. Weibust recap 2024’s most significant updates, including the Federal Trade Commission’s non-compete ban, the National Labor Relations Board’s general counsel memo, state-level trends, and much more.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists outline the benefits of intellectual property (IP) audits and trade secret assessments for employers and organizations looking to safeguard their assets:

With non-compete agreements facing continual legal pressure, what are some other ways employers can protect their trade secrets and IP?

In this episode of Spilling Secrets, Epstein Becker Green attorneys Daniel R. Levy, Gregory J. Krabacher, and Hemant Gupta describe how IP audits and trade secret assessments can offer a uniquely targeted approach to protecting sensitive information, ensuring a company has a grasp of the full scope of their assets.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists connect the enchantment of Harry Potter with the intricacies of trade secrets and restrictive covenants:

Prepare to be spellbound this Halloween as we cast a magical twist on the realm of trade secrets and restrictive covenants! Whether you're a Gryffindor at heart or more of a Slytherin, there's something for every magical mind seeking to safeguard their organization’s trade secrets.

Epstein Becker Green attorneys A. Millie Warner, Jill K. Bigler, and Aime Dempsey team up with Kristen O’Connor—Senior Assistant General Counsel, Employment at Marsh & McLennan Companies—to wave their legal wands over topics such as Professor Snape’s secret potion book, Hermione’s clever jinxes, and much more.

The United States Courts of Appeals for the Fifth and Eleventh Circuits will have their chance to weigh in on the FTC’s Noncompete Ban, which had been scheduled to go into effect on September 4, 2024, but was enjoined a couple of weeks before that date.

First, the Fifth Circuit.  The FTC Noncompete Ban was blocked on a nationwide basis on August 20, 2024, when the United States District Court for the Northern District of Texas issued a memorandum opinion and order in Ryan LLC v. Federal Trade Comm’n, Case No. 3:24-cv-00986-E, granting the plaintiff’s motion for summary judgment and setting aside the Ban.  On October 18, 2024, the FTC filed a Notice of Appeal of the opinion and order to the Fifth Circuit.  The FTC Noncompete Ban remains enjoined during the pendency of this appeal.

In addition to the Fifth Circuit appeal, the FTC is taking a second bite at the proverbial apple, in the Eleventh Circuit.  On August 15, 2024, in Properties of the Villages, Inc. v. Federal Trade Commission, Case No. 5:24-cv-316, the United States District Court for the Middle District of Florida granted the plaintiff’s motion for a preliminary injunction (although limited in scope only to the plaintiff), prohibiting the FTC from enforcing the Noncompete Ban.  This was similar to how the U.S. District Court in Texas had previously ruled, on Ryan LLC’s preliminary injunction motion.  On September 24, 2024, the FTC filed a Notice of Appeal of the Florida District Court’s preliminary injunction to the Eleventh Circuit.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists delve into the implications for employers following the recent blockage of the Federal Trade Commission’s (FTC’s) non-compete ban.

On August 20, 2024, the U.S. District Court for the Northern District of Texas invalidated the FTC’s non-compete ban, deeming it arbitrary and capricious and beyond the scope of the agency’s statutory authority.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, Erik W. Weibust, and Paul DeCamp tell us more about the court’s decision to block the ban, what legal challenges remain, and the key considerations for employers moving forward. 

Last summer, as discussed in this blog, the Georgia Court of Appeals issued a decision in N. Amer. Senior Benefits, LLC v. Wimmer that presented potential challenges for employers seeking to enforce employee non-solicitation provisions.  That case held, pursuant to Georgia’s Restrictive Covenants Act, OCGA § 13-8-50 et seq., that a restrictive covenant extending beyond the end of an individual’s employment, and undertaking to prohibit the individual from soliciting former coworkers, is unenforceable if it lacks an explicit geographic limitation. 

In a September 4, 2024 Opinion, the Georgia Supreme Court overruled that decision.  The relevant statutory provision in both cases is OCGA § 13-8-53(a), which permits enforcement of restrictive covenants “so long as such restrictions are reasonable in time, geographic area, and scope of prohibited activities.”  The Supreme Court held that “nothing in the text of subsection (a) mandates that a restrictive covenant contain an explicit geographic term, nor does subsection (a) prohibit a covenant’s geographic area from being expressed in implied terms.”

The Supreme Court continued: “In short, the plain text of subsection (a) requires with respect to geographic restrictions on competition that any such restriction be reasonable, regardless of whether the restriction is expressly stated or implied.”  The Court also noted that its reading of OCGA § 13-8-53(a) comports with the Restrictive Covenants Act’s “more permissive and flexible approach to restrictive covenants.” 

As featured in #WorkforceWednesday®: This week, we’re examining the repercussions for employers of a recent court decision that set aside the Federal Trade Commission’s (FTC’s) nationwide non-compete ban:

On August 20, 2024, the U.S. District Court for the Northern District of Texas blocked the FTC’s ban on non-compete agreements nationwide. What does this mean for employers?

Epstein Becker Green attorney Peter A. Steinmeyer tells us what employers should be doing now and outlines the implications of this decision on existing and future non-compete agreements.

Ten days ahead of her self-imposed deadline, Judge Ada Brown of the Northern District of Texas issued a memorandum opinion and order granting the plaintiffs’ motions for summary judgment, setting aside the Federal Trade Commission’s forthcoming Noncompete Ban nationwide, which was set to go into effect on September 4, 2024. In other words, as we predicted, the FTC’s Noncompete Ban is dead nationwide unless and until a Circuit Court of Appeals or the Supreme Court of the United States revives it.  

Judge Brown granted plaintiffs’ summary judgment motion as to every claim under the Administrative Procedures Act (APA) and the Declaratory Judgment Act (DJA), ruling that the FTC exceeded its statutory authority when it issued the Noncompete Ban and that the Noncompete Ban is arbitrary and capricious.

Judge Brown set the tone for her decision by quoting the Supreme Court’s recent opinion in Loper Bright Enters. v. Raimondo, 144 S.Ct. 2244, 2261 (2024), where the Court overruled the principle of Chevron deference established in Chevron U.S.A., Inc. v. Nat’l Res. Def. Council, Inc. (1984), stating: “Congress in 1946 enacted the APA as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices.”

After what must have been a grueling two-hour and 52-minute oral argument on the merits of a challenge to the FTC’s Final Rule banning noncompetes, Judge Timothy Corrigan of the United States Court for the Middle District of Florida issued a ruling from the bench in Properties of the Villages, Inc. v. Federal Trade Commission, Case No. 5:24-cv-316 granting the plaintiff’s Motion for Stay of Effective Date and Preliminary Injunction.  Importantly, as with the decision in the Northern District of Texas, the court limited the scope of the preliminary injunction to the named plaintiff only.

Judge Corrigan’s swift ruling granting the motion to stay at the completion of the hearing is a welcome decision given the looming September 4, 2024 effective date of the FTC’s noncompete ban. While the court rejected two of plaintiff’s arguments as to success on the merits, the court held that the FTC exceeded its authority under the major questions doctrine.

In particular, the court quoted Supreme Court precedent that “common sense, informed by constitutional structure, tells us that Congress normally intends to make major policy decisions itself, not leave those decisions to agencies[.]”  Judge Corrigan considered the “huge economic impact” the Final Rule would have in transferring value from employers to employees, along with the Final Rule’s political significance preempting state competition laws.  In finding that the plaintiff established a likelihood of success on the major questions doctrine, the Florida court has established a split from the Eastern District of Pennsylvania, which ruled in July that the FTC’s issuance of the Final Rule did not implicate the major questions doctrine.   

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists discuss the ongoing legal challenges to the Federal Trade Commission’s (FTC’s) nationwide non-compete ban and what the future may hold for employers:

On July 23, 2024, a federal judge in Pennsylvania denied a motion to enjoin the FTC’s non-compete ban. This ruling is in direct opposition to one by a district court in Texas that enjoined the ban in early July.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, A. Millie Warner, and Paul DeCamp look into their crystal ball and make their own predictions for how the FTC’s non-compete ban may or may not survive in the courts.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists discuss the current state of the Federal Trade Commission’s (FTC’s) nationwide non-compete ban amid ongoing legal challenges:

The FTC’s ban on non-competes will go into effect on September 4, 2024, but legal challenges remain. So, how can employers prepare?

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, Erik W. Weibust, and Paul DeCamp tell us more about how the U.S. Supreme Court’s overruling of the Chevron doctrine might affect the FTC’s ability to regulate non-competes. They also discuss a Texas court’s preliminary injunction against the FTC’s non-compete ban* and how various legal challenges have led to a somewhat anticlimactic atmosphere in the employment landscape related to the ban.

*On Tuesday, July 23, after this episode was recorded, a federal judge in Pennsylvania reached the opposite conclusion and declined to temporarily halt the FTC’s non-compete ban.

As we all await rulings on the lawsuits challenging the FTC’s Noncompete Rule (one of which may be decided later today), we provide an update on the Knicks/Raptors trade secret case that we previously discussed on EBG’s Spilling Secrets Podcast Series and blogged about here.  Although the Knicks had a successful year on the court, they suffered an in court loss last week to the Toronto Raptors.    

In the March 2024 edition, Bracket-Busting Trade Secret and Non-Compete Disputes in Sports, we discussed the Knicks’ federal court action against the Toronto Raptors for theft of trade secrets.  We noted that the Knicks sought neither a Temporary Restraining Order nor a Preliminary Injunction and that the defendants filed a motion to dismiss or, alternatively, to stay the case pending arbitration before the Commissioner of the NBA.      

In a lawsuit filed in the United States District Court for the Southern District of New York, the Knicks alleged that their former employee and now current Raptors employee, Ikechukwu Azotam, misappropriated the Knicks’ confidential and proprietary information at the behest of the Raptors, in violation of the Defend Trade Secrets Act (“DTSA”), Computer Fraud and Abuse Act (the “CFAA”), as well as various common law claims.  The defendants moved to dismiss or, alternatively, to compel arbitration pursuant to the NBA’s Constitution and By-Laws, which provide that the NBA Commissioner shall have complete and final jurisdiction over any dispute involving two or more members of the NBA. 

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, we underscore the importance of e-discovery in trade secret and restrictive covenant cases and look at how employers can use electronically stored information (ESI) to protect proprietary information:

There’s a common misperception that ESI just means emails, but it’s much more than that. ESI encompasses anything in digital or electronic form. The departure of an employee is at the root of most trade secret and restrictive covenant litigation. Therefore, when an employee departs, the timely preservation of ESI must be a standard operating procedure.

In this episode of Spilling Secrets, Epstein Becker Green attorneys A. Millie Warner and Elizabeth S. Torkelsen and special guest James Vaughn, Managing Director of iDiscovery Solutions, discuss the complicated field of digital forensics and how employers can effectively manage ESI.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law: On April 23, 2024, the FTC announced its final rule banning virtually all non-compete agreements nationwide. Employers across the nation are looking for answers.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer and Erik W. Weibust lay out the details of the ban, the legal challenges already underway,* and the actions employers should be taking.

*EBG is representing amici in one legal challenge: the U.S. Chamber of Commerce litigation.

Our colleagues Peter Steinmeyer and Erik Weibust at Epstein Becker Green co-authored an article in Thomson Reuters Practical Law, titled “Expert Q&A on the FTC's Final Rule Banning Post-Employment Non-Competes.”

Following is an excerpt (see below to download the full version in PDF format):

On April 24, 2024, the Federal Trade Commission (FTC) announced the issuance of a final rule banning employers from entering into, enforcing, or attempting to enforce post-employment non-compete clauses with workers, subject to limited exceptions, and invalidating all ...

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law: Health care employers face unique challenges and considerations when deciding whether to litigate non-compete agreements with physicians. However, in such a quickly evolving legal landscape, the decision to take the matter to court is not always clear.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Katherine G. Rigby, Erik W. Weibust, Daniel L. Fahey, and Jill K. Bigler discuss the unique challenges involved in litigating physician non-competes.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law: Restrictive covenants are evolving at a record pace right now at both the federal and state levels. Employers are struggling to keep up, and that’s especially true in the health care industry.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Katherine G. Rigby, Erik W. Weibust, Glenn P. Prives, and Denise Merna Dadika discuss restrictive covenants in relation to physician groups and other health care organizations employing direct care providers.

Explore Epstein Becker Green's 50-State Noncompete Survey, now featuring a 50-state health care supplement.

Thomson Reuters Practical Law has released the 2024 update to “Trade Secrets Litigation,” co-authored by Peter A. Steinmeyer.

The Note discusses trade secrets litigation for employers whose employees or former employees have misappropriated trade secrets. This Note describes pre-litigation investigations, sending cease and desist letters, and contacting law enforcement. It also addresses filing a legal action, including forum selection and choice of law issues, deciding whether to include the employee’s new employer and third parties, common causes of action ...

Thomson Reuters Practical Law has released the 2024 update to “Preparing for Non-Compete Litigation,” co-authored by Peter A. Steinmeyer.

The Note describes the steps an employer can take to prepare to successfully litigate a non-compete action, the primary options for enforcing a non-compete agreement, and the strategic decisions involved with each option. It discusses gathering evidence, assessing the enforceability of a non-compete, considerations before initiating legal action, cease and desist letters, seeking declaratory judgments, damages, and ...

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

California has some of the strongest regulations on restrictive covenants. How can employers in the state protect trade secrets and remain in compliance?

Epstein Becker Green attorneys Katherine G. Rigby, David Jacobs, and Phillip K. Antablin detail some best practices for California employers.

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Tune in to Spilling Secrets, a podcast series on the future of trade secrets and non-compete law.

Each episode features an all-star panel of attorneys talking about ...

For many of us, summer holidays are over, the kids are back in school, and it is a good time to take stock of languishing items on our to-do lists.  For employers that have restrictive covenant agreements with employees in Georgia, one of those to-do items should be to review the employee non-solicitation provisions in their employment agreements.

Earlier this summer, in North American Senior Benefits v. Wimmer, the Georgia Court of Appeals issued a decision that likely will make it substantially more challenging for employers to enforce employee non-solicitation provisions.  That ...

As we have previously discussed, the National Labor Relations Board’s General Counsel is seeking to invalidate noncompete agreements on the untested legal theory that they violate the National Labor Relations Act. The NLRB recently fired its latest salvo in those efforts to outlaw noncompetes.

 On September 1, 2023, the Regional Director of Region 9 of the NLRB, located in Cincinnati, Ohio, issued a Consolidated Complaint against Harper Holdings, LLC d/b/a Juvly Aesthetics (the “Company”), alleging that the Company maintains unlawful noncompete provisions in ...

This year, California was one of many states to enact legislation restricting noncompetes.  California has long had the strictest noncompete law, and employee noncompetes are already void under California Business and Professions Code § 16600 (“Section 16600”).  On September 1, 2023, California passed new legislation (“SB 699”) that further broadens Section 16600 and provides employees with new legal remedies.

The Current Law

Unless one of the narrow statutory exceptions applies, Section 16600 provides that any contract restraining a person from ...

Thomson Reuters Practical Law has released the 2023 update to “Trade Secret Laws: Illinois,” a Q&A guide on trade secrets and confidentiality for private employers in Illinois, co-authored by Peter A. Steinmeyer and David J. Clark, Members of the Firm in the Employment, Labor & Workforce Management practice.

Following is an excerpt:

This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local, or municipal law may impose additional or different requirements.

Download the full Practice ...

The New York Knicks made headlines last week when they sued the Toronto Raptors for theft of confidential and proprietary information, including scouting reports, play frequency reports, and other confidential information compiled by the Knicks coaching staff. According to the Complaint, which was filed in the Southern District of New York, former Knicks employee Ikechukwu Azotam illegally procured and disclosed confidential information to employees of the Raptors, including Raptors head coach Darko Rajaković and player development coach Noah Lewis (Azotam, Rajaković ...

We wrote previously about how nobody seemed to be talking seriously about the noncompete bill that was passed by both the New York General Assembly and Senate last month. If signed by Governor Hochul, the bill would ban noncompetes without a carveout even in the sale of a business context, which both California and the Federal Trade Commission’s proposed rule include.

As we wrote almost exactly a year ago – months before the Federal Trade Commission (FTC) issued its proposed noncompete rule – the Supreme Court’s decision in West Virginia v. EPA made it clear that the FTC does not have the authority to use its rulemaking powers to ban (or otherwise regulate) noncompetition agreements because it does not have “clear congressional authorization” to do so. The Supreme Court’s decision last week striking down the current Administration’s student loan forgiveness plan further confirms that the Supreme Court would likely strike down any noncompete rule promulgated by the FTC under the Major Questions Doctrine. See Biden v. Nebraska, 600 U.S. __ (June 30, 2023).

Earlier today (June 20, 2023) the New York State Assembly voted in favor of a noncompete ban that was passed by the New York State Senate on June 7.  In previous posts here and here, we have discussed in detail this bill that would ban noncompete agreements in New York State.  The next stop for the bill is the office of Governor Kathy Hochul, who many believe is likely to sign it into law.  Though it may be difficult to believe, New York is on the precipice of becoming the fifth state (after California, North Dakota, Oklahoma and, as of July 1, 2023, Minnesota) to ban noncompetes.  Stay tuned…

Two states recently have enacted restrictions on noncompete agreements being used within certain professions.

In Maine, on June 1, 2023, the Governor signed into law LD 688/ HP 457, entitled “An Act to Protect Access to Veterinary Care by Prohibiting Noncompete Agreements.”  The act amends Maine Revised Statute title 26, § 599-A, which already prohibits an employer from entering into a noncompete with an employee if the employee is earning wages at or below 400% of the federal poverty level. The new amendment expands the noncompete ban to licensed Maine veterinarians, with a carveout for those with an ownership interest in a practice.

Earlier this year, legislation was proposed in New York that would effectively ban all post-employment noncompetes. Few paid close attention to the proposals, ostensibly because similar legislation is proposed virtually every year in states across the country, including in New York, and typically nothing comes of it (Minnesota being the major exception, having recently passed a noncompete ban that goes into effect July 1, 2023).

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

Trade secret and non-compete litigation can result in massive damage awards, but those cases can also be unpredictable. Many viable trade secret claims go unexplored due to financial limitations or a lack of willingness to invest in litigation.

Attorney and Spilling Secrets host Erik W. Weibust and three special guests—Epstein Becker Green’s Managing Partner, James P. Flynn; Stephanie Southwick of Omni Bridgeway; and Mary Guzman of Crown Jewel Insurance—discuss the monetization of trade secrets litigation.

New York State may soon join the growing list of jurisdictions restricting or banning noncompete agreements. On June 7, 2023 the New York State Senate passed S 3100A (the “Bill”), which would prohibit employers from seeking, requiring, demanding, or accepting certain noncompete agreements.

On June 2, 2023, the Federal Trade Commission (FTC) announced that it finalized a consent order with Anchor Glass Container Corp. (“Anchor Glass”).

This consent order follows the FTC’s administrative complaint, filed in March 2023, against Anchor Glass and its controlling owners (the “Respondents”). The FTC’s complaint alleged that Anchor had entered into non-compete agreements with more than 300 employees and that these non-compete agreements were unfair and had the “tendency or likely effect of harming competition, consumers, and workers . . . .” 

On May 17, 2023, U.S. Senator Rob Wyden (D-OR) announced the release of a long-awaited report on the U.S. Government Accountability Office’s multi-year investigation into the use of noncompete agreements across the U.S. labor market. In announcing the release, Senator Wyden said that the GAO report “highlights the problems of noncompete agreements – particularly their impact on limiting workers’ fundamental freedom to change jobs,” and pledged to “fight tooth and nail for fair labor laws that protect workers and promote the creation of new businesses in Oregon and nationwide.”

The National Labor Relations Board’s top lawyer, Jennifer Abruzzo, issued  a General Counsel memo today instructing the Labor Board’s Regional Directors of her position  that noncompete clauses for employees protected by the National Labor Relations Act (NLRA) (i.e., nonmanagerial and nonsupervisory employees) in employment contracts and severance agreements violate federal labor law except in limited circumstances. The memo, while not law, outlines her legal theory which she will present to the National Labor Relations Board, which makes law primarily through adjudication of unfair labor practice cases.  The memo instructs the agency’s field offices of the position that the General Counsel is instructing them to take when investigating unfair labor practice charges claiming that such clauses interfere with employees’ rights under the NLRA.

For the last decade, one of the biggest issues in Illinois noncompete law has been what constitutes adequate consideration for a post-employment restrictive covenant, apart from employment lasting at least two years after the agreement was signed.  The “24 month rule” set forth in Fifield v. Premier Dealer Services, Inc., 2013 IL App (1^st) 120327 has caused much head-scratching, and the Illinois legislature essentially punted on the issue in the recent amendments to the Illinois Freedom to Work Act, 820 ILCS 90/1, et seq. (effective as of January 1, 2022).  (Full disclosure: One of the authors of this post advised the Illinois Chamber of Commerce in its negotiations with the State legislature over this law and, hence, can speak from personal experience on the legislative history of this “punt.”)

As expected, on May 24, 2023, Governor Tim Walz signed a new law banning noncompete agreements in Minnesota.  The ban will be effective for such agreements entered on or after July 1, 2023.

By enacting the Omnibus Jobs, Economic Development, Labor and Industry appropriations bill (MN SF 30035), Minnesota becomes only the fourth state (along with California, Oklahoma and North Dakota) to ban noncompetes. 

The day after obtaining federal brokerage authority for the logistics company he formed a month earlier, Christopher Johnson, a North Carolina resident, resigned from his employment with Cincinnati-based Total Quality Logistics, LLC (“TQL”). TQL then sued Johnson and his company Patriot Logistics (“Patriot”) in the Clermont County Court of Common Pleas, alleging Johnson breached his employment agreement and misappropriated trade secrets in forming Patriot while still employed by TQL.

Johnson and Patriot removed the case to federal district court based on diversity jurisdiction. TQL moved to remand the case back to state court, arguing the $75,000 amount in controversy requirement was not met. After the federal court denied TQL’s remand motion, TQL voluntarily dismissed the case and refiled in state court. Johnson and Patriot removed the case yet again.

According to Bloomberg, The Federal Trade Commission (“FTC”) is not expected to vote on the final version of a new rule that would ban noncompete clauses in employment contracts until April 2024. The rule defines a “non-compete clause” as “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.”

As we previously reported, the proposed rule would ban employers from imposing noncompete agreements on their employees. The rule would also require employers to rescind all preexisting noncompete agreements and to notify all employees who had been subject to a noncompete agreement of the recission. Although the proposed rule would not prohibit other kinds of employment restrictions, such as nondisclosure agreements, certain restrictions that are overbroad could be subject to the new rule. For example, a non-disclosure agreement between an employer and an employee that is written so broadly that it effectively precludes the employee from working in the same field would be considered a “de facto” noncompete clause.

Earlier this year, the United States Department of Justice (“DOJ”) announced that it was launching the Disruptive Technology Strike Force (“Strike Force”) in an effort “to target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries.”  The DOJ’s initial announcement can be found here.  The Strike Force is co-led by the DOJ and Commerce Department with the goal of countering efforts by hostile nation-states seeking to illegally acquire sensitive United States technology.  On May 16, 2023, the DOJ announced criminal charges in five cases from five different U.S. Attorney’s Offices in connection with the Strike Force’s efforts.  Two of the cases involve allegations of trade secret theft from U.S. technology companies with the intent to market the technology in foreign countries. 

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

Human capital often drives the value of merger and acquisition (M&A) deals in the health care industry. Buyers involved in these deals must retain key employees to secure that value.

Epstein Becker Green’s Spilling Secrets hosts Erik W. Weibust and Katherine G. Rigby join forces with the Diagnosing Health Care podcast hosts Daniel L. Fahey and Timothy J. Murphy to talk about strategies to retain these employees.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

The inevitable disclosure doctrine, expected to be a widely used tool to protect trade secrets after the famous PepsiCo, Inc. v. Redmond case in 1995, has not been as commonly employed as anticipated. But is the legal landscape about to change?

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

The 2023 Academy Awards are over, but we’re keeping the awards season alive with our very own Trade Secrets Fail Awards, highlighting Hollywood’s biggest missteps in depicting trade secret issues on-screen.

Panelists Peter A. Steinmeyer, Katherine G. Rigby, A. Millie Warner, and Daniel R. Levy discuss their picks for the worst trade secret theft and misappropriation in the movies and on television.

On February 21, 2023, the National Labor Relations Board (“NLRB” or “Board”) continued its aggressive application of the National Labor Relations Act (“Act” or “NLRA”) to workplaces without union representation and lessened the value of severance agreements for all employers by finding it unlawful for an employer to merely proffer a severance agreement that includes broad non-disparagement and confidentiality provisions to an employee. In McLaren Macomb, the Board held that a severance agreement that contains a confidentiality clause and a non-disparagement clause was unlawful because, in the Board’s view, these provisions impermissibly infringe on employees’ rights under the Act. Specifically, the Board found that these two provisions limit employees’ ability to discuss their wages, hours, and working conditions (which could include disparaging remarks) with other employees, prevent employees from assisting other employees seeking assistance, and hinder employees themselves from seeking assistance from the NLRB, unions, and other outside organizations.

Thomson Reuters Practical Law has released the 2023 update to “Trade Secrets Litigation,” co-authored by our colleague Peter A. Steinmeyer.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

On January 5, 2023, the Federal Trade Commission (FTC) announced a proposed rule that would ban employers from using non-compete clauses.

Panelists Peter A. Steinmeyer and Erik W. Weibust and featured guest attorney Stuart M. Gerson discuss the proposed rule and next steps for employers.

Thomson Reuters Practical Law has released the 2023 update to “Preparing for Non-Compete Litigation,” co-authored by our colleague Peter A. Steinmeyer.

Following is an excerpt (see below to download the full version in PDF format):

Non-compete litigation is typically fast-paced and expensive. An employer must act quickly when it suspects that an employee or former employee is violating a noncompete agreement (also referred to as a non-competition agreement or non-compete). It is critical to confirm that there is sufficient factual and legal support before initiating ...

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

The holidays are over, and year-end bonuses are being paid, making January and the first quarter a common time for employees to jump ship to work for a competitor.

Our all-star panel of attorneys – Pete Steinmeyer, Kate Rigby, Millie Warner, and Erik Weibust – discuss what an employer should do in this situation.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

The year is coming to a close, and it was a big one in the world of trade secrets and non-competes. In this episode, we’re running down the key trends of 2022.

Our colleagues Erik Weibust, Carter DeLorme, and Philip Antablin co-authored an article in AHLA’s Health Law Connections, titled “Securing Key Employees in Health Care M&A Transactions with Restrictive Covenants.” (Read the full version – subscription required.) 

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

When faced with trade secret misappropriation, employers must decide how to proceed. In this episode, hear some tips on how and why employers might choose to refer the matter for criminal investigation.

Thomson Reuters Practical Law has released an update to “Trade Secret Laws: Connecticut,” a Q&A guide to state law on trade secrets and confidentiality for private employers in Connecticut, co-authored by our colleagues David S. Poppick and Carol J. Faherty, attorneys at Epstein Becker Green.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

Non-compete agreements are generally unenforceable against lawyers, but there are some exceptions. In this episode, hear about employer options for restrictive covenants, including non-competes, non-solicits, and confidentiality agreements, for both in-house and outside lawyers.

It’s no secret that the U.S. Postal Service (USPS) has been struggling financially for well over a decade. One means of combatting its struggles has been to contract with third-party resellers to market USPS services and drive customers to it. Indeed, just one of those resellers, Express One, delivered over $3 billion in revenue to the USPS in the past 12 months alone. Although the annual operating budget of the USPS is $77 billion, $3 billion is still real money—especially since the USPS suffered losses of $6.9 billion last year.

“The law is not a game, and . . . civil discovery is not a game of hide and seek. The decision in this case should encourage litigants to understand that it is risky business to recklessly or deliberately fail to produce documents, and perilous to disobey court orders to review and, if necessary, supplement prior productions. It is in the interests of the administration of justice to default [defendants] to send those messages.”

So said United States District Judge Mark L. Wolf in a 72-page decision in which he entered a default judgment as a sanction in a trade secret case against the defendants for what he referred to as “extreme misconduct.” Memorandum and Order on Plaintiff’s Motion for Sanctions, Red Wolf Energy Trading, LLC v. BIA Capital Mgmt., LLC, et al., C.A. No. 19-10119-MLW (D. Mass. Sept. 8, 2022).

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

An employer often overlooks training employees on what their restrictive covenant means and how to honor their confidentiality, non-competition, and non-solicitation obligations. But this type of training can be critical for employers in protecting trade secrets and avoiding litigation in the future.

As our antitrust colleagues explained recently, on August 26, 2022, the Federal Trade Commission (FTC) published its “Strategic Plan for Fiscal Years 2022–2026,” as required under the GPRA Modernization Act of 2010.  Readers of this blog will be interested in two small, but important, items in the Strategic Plan related to noncompete agreements.

First, under “Objective 2.1: Identify, investigate, and take actions against anticompetitive mergers and business practices,” the FTC opines that “[a]nticompetitive mergers and business practices harm Americans through higher prices, lower wages, or reduced quality, choice, and innovation. Enforcement of antitrust laws provides substantial benefits to the public by helping to ensure that markets are open and competitive.” It then identifies certain “[s]trategies” that the FTC intends to pursue over the next five years, including “[i]ncreas[ing] use of provisions to improve worker mobility including restricting the use of non-compete provisions.” It’s unclear exactly what provisions it intends to increase its use of, but nonetheless the FTC will be focused on the issue.

Thomson Reuters Practical Law has released the 2022 update to “Trade Secret Laws: Illinois,” a Q&A guide to state law on trade secrets and confidentiality for private employers, authored by our colleagues Peter Steinmeyer and David Clark at Epstein Becker Green.

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

Two and a half years into the pandemic, it appears that remote work is here to stay, to varying degrees, in virtually all industries. How do restrictive covenants work in this remote work era? In this Spilling Secrets episode, hear how employers are addressing restrictive covenant concerns now that employees may be located anywhere.

As we have previously reported, the Colorado Assembly passed sweeping changes to the state’s noncompete law that, among other things, (1) set compensation floors for enforcement of both noncompetes ($101,250) and customer non-solicitation agreements ($60,750), which will be adjusted annually based on inflation; (2) require a separate, standalone notice to employees before a new or prospective worker accepts an offer of employment, or at least 14 days before the earlier of: (a) the effective date of the restrictions, or (b) the effective date of any additional compensation or changes in the terms or conditions of employment that provide consideration for the restriction, for existing workers; and (3) prohibit the inclusion of out-of-state choice-of-law and venue provisions. Those amendments take effect today, August 10, 2022.

Compliance with these amendments is even more important due to a prior amendment, effective earlier this year, which provides that violations of Colorado’s noncompete law can subject employers to criminal liability (a Class 2 misdemeanor, which carries possible punishment of 120 days in prison, a $750 fine per violation, or both), as well as hefty fines and possible injunctive relief and attorneys’ fees to aggrieved workers.

As readers of this blog likely know, many states have entirely different statutory schemes for noncompetes in the healthcare industry. Indeed, while 47 states generally permit noncompetes, more than a dozen expressly prohibit or limit them in certain sectors of the healthcare industry – typically for patient-facing clinicians.

For example, in Massachusetts, noncompetes are not permissible in “[a]ny contract or agreement which creates or establishes the terms of a partnership, employment, or any other form of professional relationship with a physician registered to practice medicine . . . , which includes any restriction of the right of such physician to practice medicine in any geographic area for any period of time after the termination of such partnership, employment or professional relationship.” The same restriction applies to Massachusetts nurses, psychologists, and social workers.

Despite the Supreme Court’s recent 6-3 ruling in West Virginia v. EPA that regulatory agencies must have “clear congressional authorization” to make rules pertaining to “major questions” that are of “great political significance” and would affect “a significant portion of the American economy,” and the import of that ruling to the area of noncompete regulation (which we addressed in detail in Law360), the Federal Trade Commission (FTC) and National Labor Relations Board (NLRB) announced yesterday that they are teaming up to address certain issues affecting the labor market, including the regulation of noncompetes.

In a Memorandum of Understanding (MOU) issued on July 19, 2022, the FTC and NRLB shared their shared view that:

Welcome to Spilling Secrets, a new monthly podcast series on the future of non-compete and trade secrets law.

If you’re hiring from a competitor amid the Great Resignation, one of your top priorities is not getting sued.

Washington, D.C. employers will not need to scrap all their non-compete agreements after all.  On July 12, 2022, the D.C. Council (the “Council”) passed the Non-Compete Clarification Amendment Act of 2022 (B24-0256) (the “Amendment”), which among other things, tempers the District’s near-universal ban on non-compete provisions to permit restrictions for highly compensated employees.  For further analysis on the original D.C. Ban on Non-Compete Act, please see our previous articles here and here.

The Council delayed the initial ban several times in response to feedback from employer groups.  However, barring an unlikely veto or Congressional action during the mandatory review period, the amended ban will take effect as of October 1, 2022.  We detail the key revisions to the ban below.

Exchange Act Rule 21F-17, adopted in 2011 under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement . . . .”  The SEC has prioritized enforcing this rule expansively, by requiring employers to provide SEC-specific carveouts to policies and agreements governing confidentiality.  According to an Order issued last week against The Brink’s Company ( “Brink’s” or “Brinks”), the SEC seems to suggest that employers must provide a specific carveout in restrictive covenant agreements permitting employees and former employees to report information to the SEC in addition to the statutory disclosure provided for in the federal Defend Trade Secrets Act (DTSA).

On March 24, 2022, Washington State signed into law the Silenced No More Act (the “Act”), greatly restricting the scope of nondisclosure and nondisparagement provisions employers may enter into with employees who either work or reside in Washington State. Effective June 9, 2022, the Act prohibits employers from requiring or requesting that an employment agreement contain a provision:

not to disclose or discuss conduct, or the existence of a settlement involving conduct, that the employee reasonably believed under Washington state, federal or common law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy….

A California Superior Court Judge in Orange County granted an attorneys’ fees award in the amount of $5.8 million to defendant Landmark Event Staffing Services, Inc. (“Landmark”) in Contemporary Services Corporation v. Landmark Event Staffing Services, Inc., Case No. 30-2009-00123939. This ruling reinforces the importance of carefully calibrating litigation strategy in trade secrets misappropriation cases to focus on vindicating legally protectable interests. Trade secrets litigation should not be used merely as an aggressive tactic to stifle a competitor.

In a pending trial in federal court in Boston in the case U.S. v. Haoyang Yu, et al., prosecutors accuse a design engineer and naturalized citizen from China of stealing microchips (monolithic microwave integrated circuits or “MMICs” used in radio, cellular and satellite communications) from his former employer Analog Devices, Inc. As reported in Law360, during opening statements last week, a federal prosecutor told the jury, “It’s a story of fraud. It’s a story of possession of stolen trade secrets. It’s a story of illegal exports and immigration fraud.” In support ...

On May 2, 2022, a bill “limiting certain provisions in restrictive covenants” was introduced in the New Jersey State Assembly.  In recent years, similar bills have been proposed in various state legislatures.  Some such bills, after much lobbying, haggling and revisions, have even been enacted into law, including, for example, in Massachusetts, Illinois and Washington.

Thomson Reuters Practical Law has released the 2022 update to “Preparing for Non-Compete Litigation,” co-authored by our colleague Peter A. Steinmeyer.

Thomson Reuters Practical Law has released the 2022 update to “Trade Secrets Litigation,” co-authored by our colleague Peter A. Steinmeyer.

A significant opinion concerning computer security was one of those the United States Supreme Court (“SCOTUS”) issued during its end-of-term flurry this year.  Employers and others who permit computer access to sensitive information for business or other defined purposes may want to take note. Spoiler alert:  the opinion undercuts use of the Computer Fraud and Abuse Act of 1986 (“CFAA”), 18 U.S.C. §1030 et seq., to obtain federal jurisdiction in employer-employee disputes. (As a practical matter, the Defend Trade Secrets Act of 2016 had already filled the gap for many ...

Our colleagues David S. Poppick and Carol J. Faherty have co-authored the 2021 update to “Trade Secret Laws: Connecticut,” a Q&A guide to state law on trade secrets and confidentiality for private employers in Connecticut, published by Thomson Reuters Practical Law.

Following is an excerpt (see below to download the full version in PDF format):

This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local, or municipal law may impose additional or different requirements. Answers to questions ...

On March 16, 2021, the U.S. Court of Appeals for the D.C. Circuit affirmed defendant Shan Shi’s conviction for conspiracy to commit theft of trade secrets. Given recent efforts at the state and now federal level to ban non-competes, employers may be more likely to consider partnering with law enforcement to remedy trade secret theft.

The Court’s opinion begins with the statement, “We can’t always get what we want, but, sometimes, we get what we need.” Unfortunately, the Court’s opinion continues, what Shi’s company needed were seven documents containing a ...

In a case with significant ramifications for employers concerned with protecting sensitive information, and for employees accused of abusing access to computer networks, the United States Supreme Court (“SCOTUS”) heard oral argument this week in Van Buren v. United States, No. 19-783, a case from the Court of Appeals for the Eleventh Circuit that will require interpretation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030.  The argument was lively.  All of the Justices asked questions, and several expressed concern about vagueness in the CFAA’s definition ...

The 2020 update to our Practice Note, “Garden Leave Provisions in Employment Agreements,” is now available from Thomson Reuters Practical Law.  We discuss garden leave provisions in employment agreements as an alternative or a companion to traditional employee non-compete agreements.

Following is an excerpt (see below to download the full article in PDF format):

In recent years, traditional non-compete agreements have faced increasing judicial scrutiny, with courts focusing on issues such as the adequacy of consideration, the propriety of non-competes for lower level ...

In Payward, Inc. v. Runyon, Case No. 20-cv-02130-MMC, the United States District Court for the Northern District of California granted a Rule 12(b)(6) motion, ruling that information alleged to be “secret” failed to qualify as a “trade secret” under the Defend Trade Secrets Act.  The Court applied California and federal precedent explaining trade secret information confers a competitive business advantage, and found the complaint lacked any such allegations.  The decision make sense given the particular allegations in the case.  But does a “competitive business ...

Thomson Reuters Practical Law has released the 2020 update to “Trade Secret Laws: Illinois,” a Q&A guide to state law on trade secrets and confidentiality for private employers, authored by our colleague David J. Clark at Epstein Becker Green.

The Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local, or municipal law may impose additional or different requirements. Answers to questions can be compared across several jurisdictions.

Download the full Q&A in PDF format here: Trade Secret ...

Thomson Reuters Practical Law has released the 2020 update to “Trade Secret Laws: Connecticut,” a Q&A guide to state law on trade secrets and confidentiality for private employers, co-authored by our colleagues David S. Poppick and Carol J. Faherty, attorneys in Epstein Becker Green’s Stamford office.

Click here to download the full Q&A in PDF format.

After more than three years of litigation and two rounds of extensive discovery, in Calendar Research LLC v. StubHub, Inc., et al., 2:17-cv-04062-SVW-SS, the United States District Court for the Central District of California dismissed almost all the remaining claims against StubHub and the other defendants.  In doing so, the Court confirmed that in California, specific identifiable trade secrets are required and general industry knowledge and “know how” is insufficient for trade secret protection.

The individual defendants founded and/or worked for a startup named ...

A recent decision issued by the U.S. District Court for the Northern District of California, San Jose Division, presents a stark example of what can result when a defendant accused of trade secret misappropriation is careless in preserving electronically stored information (“ESI”) relevant to the lawsuit.

Silicon Valley-based autonomous car startup WeRide Corp. and WeRide Inc. (collectively, “WeRide”) sued rival self-driving car company AllRide.AI Inc. (“AllRide”), along with two of its former executives and AllRide’s related companies, asserting claims ...

For any attorney about to rush into New York State court to seek an injunction or temporary relief with regard to a violation of a non-compete or other restrictive covenant, or with regard to misappropriation of trade secrets, think again about venue.

By Administrative Order, dated March 22, 2020, Chief Administrative Judge Lawrence Marks has decreed that until further notice, New York State courts are accepting no filings unless the filings concern an emergency matter (as defined in the Order’s Exhibit A).  Neither restrictive covenant nor trade secret matters count as ...

We encourage our readers to visit Workforce Bulletin, the newest blog from our colleagues at Epstein Becker Green (EBG).

Workforce Bulletin will feature a range of cutting-edge issues—such as sexual harassment, diversity and inclusion, pay equity, artificial intelligence in the workplace, cybersecurity, and the impact of the coronavirus outbreak on human resources—that are of concern to employers across all industries. EBG's full announcement is here.

Click here to subscribe for email notifications—you’ll receive a confirmation email to click.

(And if you haven't ...

A New London Connecticut Superior Court jury awarded an $839,423 verdict in November 2019, involving theft of trade secrets for a $70 million U.S. Navy underwater drone project. This case, LBI, Inc. v. Sparks, et al., KNL-cv12-6018984-S, is a classic example of the blatant theft of an employer’s confidential and proprietary information that is so easily traceable to electronic files – and the costly consequences for the defendant employer’s complicity in that trade secret misappropriation.

Plaintiff LBI, Inc., a small Groton-based research and design development ...

A federal judge in Chicago recently held that an individual can be convicted of attempting to steal a trade secret, even if the information at issue did not actually constitute a trade secret, so long as the individual believed that the information was a trade secret.

In United States of America v. Robert O’Rourke Opinion, Judge Andrea R. Wood denied a post-conviction motion for a new trial in a case involving attempted and actual trade secret theft.  The decision involved a metallurgical engineer and salesperson, Robert O’Rourke, who resigned his employment to take a position as ...

I'm pleased to present the 2019 update to our "Trade Secrets Litigation" Practice Note, published by Thomson Reuters Practical Law. My co-author Zachary Jackson and I discuss litigation for employers whose employees have misappropriated trade secrets.

See below to download it in PDF format—following is an excerpt:

California, the Golden State, is a special place to live and work. However, if you are an employer in California, you have most likely heard warnings of what you cannot do in terms of protecting your workforce and trade secrets and preventing unfair competition. While the rules of the road are different in California, employers are not without tools to protect their resources. And those tools are the focus of this program: what you can do to protect your workforce and trade secrets in California.

Join our colleagues Steven R. Blackburn, James A. Goodman, and Peter A ...

The 2019 legal landscape of employee mobility continues to evolve, at times drastically. Courts and legislatures are giving increased scrutiny to employers’ claims to protect the confidentiality of their trade secrets and attempts to enforce their employees’ restrictive covenants, including non-competition and non-solicitation agreements. It can be hard for employers to prevent their confidential information and client goodwill from following certain departing employees.

With greater knowledge of the latest legal theories, decisions, statutes, and other ...

Pursuant to a recently passed Oregon state law (HB 2992), noncompete agreements entered into on or after January 1, 2020 will only be enforceable against Oregon employees if the employer provides the departing employee with a signed copy of the agreement within 30 days after the employee’s date of termination.  Though at first blush, this law merely codifies the best practice of reminding departing employees of their continuing obligations to their former employer, it contains a few nuances Oregon employers should keep in mind.

The law requires employers to provide departing ...

Webinar – Wednesday, June 26, 2019, 12:00 p.m. - 1:00 p.m. PDT

California, the Golden State, is a special place to live and work. However, if you are an employer in California, you have most likely heard warnings of what you cannot do in terms of protecting your workforce and trade secrets and preventing unfair competition. While the rules of the road are different in California, employers are not without tools to protect their resources. And those tools are the focus of this program: what you can do to protect your workforce and trade secrets in California.

Join our colleagues Steven ...

Tuesday, May 7, 2019
Downtown Chicago Dinner Program

Wednesday, May 8, 2019
Repeat Suburban Lunch Program

Join our colleagues Lauri Rasnick, Kevin Ryan, and Peter Steinmeyer for an interactive panel discussion which will provide insights into recent developments and expected trends in the evolving legal landscape of trade secret and non-competition law. This program will also discuss unique issues and developments in the health care and financial services industry. Our colleagues will also be joined by Thomas J. Shanahan, Associate General Counsel at Option Care.

Issues ...

A federal judge in Chicago recently taught a painful lesson to an Illinois employer: even if information is sufficiently sensitive and valuable that it could qualify as a “trade secret,” it won’t unless the owner of the information took adequate steps to protect its secrecy.

In a thorough opinion issued in the case, Abrasic 90 Inc., d/b/a CGW Camel Grinding Wheels, USA v. Weldcote Metals, Inc., Joseph O’Mera and Colleen Cervencik, U.S. District Judge John J. Tharp, Jr. of the Northern District of Illinois explained that “there are two basic elements to the analysis” of ...

Employee restrictive covenant agreements often contain fee-shifting provisions entitling the employer to recover its attorneys’ fees if it “prevails” against the employee. But “prevailing” is a term of art in this context. Obtaining a TRO or preliminary injunction is not a final decision on the merits, so does obtaining a TRO or preliminary injunction trigger a fee-shifting provision? A recent case illustrates that an employer can sidestep this potentially thorny issue by using careful and thoughtful drafting.

In Kelly Services, Inc. v. De Steno, 2019 U.S. App. LEXIS ...

Tuesday, January 29, 2019
12:30 p.m. - 1:45 p.m. ET 

Issues arising from employees and information moving from one employer to another continue to proliferate and provide fertile ground for legislative action and judicial decisions. Many businesses increasingly feel that their trade secrets or client relationships are under attack by competitors—and even, potentially, by their own employees. Individual workers changing jobs may try to leverage their former employer’s proprietary information or relationships to improve their new employment prospects, or may simply be ...

Join Epstein Becker Green attorneys, Brian G. Cesaratto and Brian E. Spang, for a discussion of how employers can best protect their critical technologies and trade secrets from employee and other insider threats. Topics to be discussed include:

• Determining your biggest threat by using available data
• What keeps you up at night?
• Foreseeing the escalation in risk, from insider and cyber threats to critical technologies
• New protections and remedies under the Trade Secret Protection Act of 2014
• Where are your trade secrets located, and what existing protections are in place?
• What ...

In E.J. Brooks Company v. Cambridge Security Seals, the Court of Appeals of New York narrowed the scope of permissible damage claims plaintiffs can assert in trade secret actions under New York law. The ruling denies plaintiffs the ability to recover costs that defendants avoided through misappropriating trade secrets (known as “avoided costs” theory), making New York law less attractive to certain types of trade secret actions due to the state’s conservative approach in calculating damages.

E.J. Brooks Company d/b/a TydenBrooks ("TydenBrooks"), the largest ...

We published an article with NYSBA Labor and Employment Law Journal, titled “Employee Threats to Critical Technologies Are Best Addressed Through a Formalized Insider Threat Risk Assessment Process and Program.” With the New York State Bar Association's permission, we have linked it here.

Following what it described as a three year “one-man legal circus,” a Seventh Circuit panel recently affirmed a sanction award of over $440,000 in a trade secret misappropriation case, after finding that the defendant, Raj Shekar, “demonstrated nothing but disrespect, deceit, and flat-out hostility[.]” Teledyne Technologies Incorporated v. Raj Shekar, No. 17-2171, 2018 U.S. App. LEXIS 17153, at *13 (7th Cir. June 25, 2018).

Shekar worked at Teledyne Technologies as a marketing and sales manager from June 2013 until he was fired less than two years later. Following his ...