Trade Secrets & Employee Mobility

High-stakes trade secret cases are typically aggressively prosecuted. But plaintiffs (and their attorneys) who prosecute these claims face substantial risks if the evidence does not support the contention that a trade secret has been misappropriated. Even a plaintiff who may have initiated a misappropriation action in good faith risks attorneys’ fees and malicious prosecution liability by continuing to prosecute the matter after it learns that the case is not substantiated.

Section 4 of the Uniform Trade Secrets Act authorizes a court to award costs and attorneys’ fees if ...

In Nedschroef Detroit Corp. et al. v. Bemas Enterprises et al., the U.S. Court of Appeals for the Sixth Circuit recently affirmed an award of nearly $3.7  million in damages against two individuals found to have engaged in misconduct related to the operation of a business which competed with their employer.

Nedschroef Detroit Corporation (“Nedschroef”) services and provides replacement parts for fastener machines made by an affiliate in Europe.  Without Nedschroef’s knowledge, two of its employees formed a business – under their wives’ names – to do exactly what ...

After years of stops and starts in Congressional efforts to pass a law creating a federal claim for misappropriation of trade secrets that can be pursued by private citizens and companies (as opposed to federal prosecutors), the last few weeks have produced an astonishing acceleration of those efforts.  This month, the Defend Trade Secrets Act has been approved by both houses of Congress in resounding fashion.  It is on the brink of being enacted into law.

On April 27, 2016, the House of Representatives voted 410-2 to pass the Defend Trade Secrets Act.  That vote came quickly on the heels of ...

Restrictive covenant agreements are traditionally governed by state law and thus subject to various jurisdictions’ rules regarding enforceability. They stand on a different footing than most other contracts, in that their enforcement is typically susceptible to a court’s equitable powers, and may not always be enforced as written, if at all. States differ on whether their courts will deny enforcement of a restrictive covenant deemed overbroad as written by the parties or instead modify it to meet the particular state’s standards of enforceability. In those states where ...

[caption id="attachment_2116" align="alignright" width="113"] James P. Flynn[/caption]

The State of Utah recently enacted Utah Code Annotated 34-51-101 et seq., the so-called Post-Employment Restrictions Amendments, which limit restrictive covenants entered into on or after May 10, 2016 to a one-year time period from termination. Although this could curtail certain employers’ plans, the amendments enacted provide some important exceptions and are in fact much more favorable to employers than those first proposed, which would have precluded virtually all ...

[caption id="attachment_2106" align="alignright" width="90"] Matthew Aibel[/caption]

[caption id="attachment_2105" align="alignright" width="90"] Anthony Laura[/caption]

With remote access technology becoming standard across industries, companies readily engage a multi-state workforce, with many employees residing outside of the employer’s home state.  While an expanded access to talent may be beneficial, one drawback is the ability to enforce restrictive covenants with out of state employees in a consistent manner and in the employer’s home state.  The case ...

A featured story on Employment Law This Week is a Massachusetts court's ruling that former counsel is not barred from giving advice to a competitor.

An in-house lawyer for Gillette left the company 10 years ago. Four years later, he became General Counsel for Shavelogic, a Gillette competitor. Gillette recently tried to obtain a broad injunction against the lawyer, who they claimed would inevitably disclose trade secrets in his position. The Massachusetts Superior Court’s Business Litigation Session ruled that there was insufficient evidence that trade secrets would be ...

[caption id="attachment_2093" align="alignright" width="120"] Barry A. Guryan[/caption]

The Speaker of the Massachusetts House of Representatives, Robert DeLeo, announced last week that he will introduce a compromise bill this session to place limits on the enforcement of non-competes in Massachusetts.

The Speaker’s stated motive is to find a balance between the goal of protecting businesses in Massachusetts and fostering a business environment that encourages the incubation for talent. The proposed bill would place a 12-month limit on non-compete agreements ...

Our colleagues Lauri F. Rasnick and Adriana S. Kosovych, attorneys in the Employment, Labor & Workforce Management practice at Epstein Becker Green, have a post on the Financial Services Employment Law blog that will be of interest to many of our readers: "Implementing and Applying the Employee Choice Doctrine: Employers Focus on Forfeiture to Protect Their Company’s Assets."

Following is an excerpt:

Employers seeking to protect their competitive advantage and find an alternative method of influencing employees to not compete are increasingly relying on ...