Trade Secrets & Employee Mobility

Last week, Chicago district judge Charles Kocoras dismissed a declaratory judgment action challenging the enforceability of a facially broad form non-compete agreement signed by all employees of the Jimmy John’s sandwich chain.  Judge Kocoras held that the dispute was not judiciable because the plaintiffs lacked the requisite “reasonable apprehension” of litigation against them and because they failed to allege that they had actually engaged in conduct that would violate the non-compete.  (Judge Kocoras’ memorandum opinion also addressed significant joint ...

In another decision expansively interpreting California Business & Professions Code § 16600 and which could have a significant effect on employment litigation settlements, the Ninth Circuit Court of Appeals reversed the district court’s enforcement of a settlement agreement and remanded the case to the district court to determine whether a no employment provision in the agreement is a “restraint of substantial character” to the Plaintiff's medical practice.  Golden v. California Emergency Physicians Medical Group; Med America; Mark Alderdice; Robert Buscho, United ...

On March 20, 2015, a California federal court rejected an expansive reading of the Computer Fraud and Abuse Act (“CFAA”) urged by two plaintiff corporations that sought to hold a competitor and two of its directors liable under the CFAA, under an agency theory, for the actions of a former employee who allegedly downloaded and stole the corporations’ confidential trade secrets.

The plaintiffs, Koninklijke Philips N.V. and Philips Lumileds Lighting Company (“Lumileds”) are engaged in the business of Light Emitting Diode (“LED”) technology.  They alleged that Dr ...

In Fifield v. Premier Dealer Services, Inc., an Illinois Appellate Court determined that, absent other consideration, at-will employment must continue for two years in order to constitute consideration for the enforcement of competition restrictions.  Clients continue to ask how Fifield has been applied by subsequent courts.  So far, the results have been mixed.  This month, the United States District Court for the Northern District of Illinois rejected Fifield’s bright line test in the case of Bankers Life and Casualty Co. v. Miller, 2015 U.S. Dist. LEXIS 14337 (N.D. Ill. Feb. 6 ...

In the year-end holiday rush, employers and other trade secret owners may not have noticed that the Judiciary Committee of the United States House of Representatives in mid-December reported favorably on HR 5233, a proposal to create a federal civil cause of action concerning trade secrets. (Click here for copy of Committee Report and here for text of bill). The Senate has its own version. (Click here). While Congress did not vote on it before year end, the bill is said to have bi-partisan support in the House and there are intimations of White House approval.

The House Report provides the ...

Readers of this blog know that in the summer of 2013, long held beliefs about the required consideration for a restrictive covenant under Illinois law were thrown a curve when the Illinois Appellate Court for the First District (i.e., Cook County) held in Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, that, absent other consideration, two years of employment is required for a restrictive covenant to be deemed supported by adequate consideration—even where the employee signed the restrictive covenant as a condition to his employment offer and even where the ...

A recent Opinion issued by the Arizona Supreme Court highlights a noteworthy dichotomy in the way various states interpret the pre-emptive effect of their respective Uniform Trade Secrets Acts (“UTSA”). Forty-eight states have enacted some form of the UTSA, which aims to codify and harmonize standards and remedies regarding misappropriation of trade secrets that had emerged in common law and which differed from state to state. Only New York and Massachusetts have not enacted some form of the UTSA.

One important feature of the UTSA is its pre-emptive effect upon state common law ...

To register for this webinar, please click here.

Join Epstein Becker Green Attorneys David J. Clark, Robert D. Goldstein, and Peter A. Steinmeyer on Tuesday, December 16, 2014 at 1:00 p.m. EST for a 60-minute webinar.

This webinar will discuss recent developments and what to expect in the evolving legal landscape of trade secrets and non-competition agreements. With some businesses progressively feeling that their trade secrets are at risk for attack by competitors – and perhaps, by their own employees – this session will focus on how to navigate this developing area and ...

A new Uniform Trade Secrets Act bill has been proposed by the Massachusetts Board of Commissioners on Uniform State Laws for the Massachusetts Legislature to consider in its 2015 legislative session. The proposed bill represents another effort to bring Massachusetts law protecting trade secrets in line with that of the vast majority of other states. As discussed here last August, previous efforts to reform Massachusetts law on trade secrets and non-compete agreements have failed, including Governor Patrick’s efforts in the last legislative session to make non-compete ...

After a bench trial, a Connecticut state court rejected a violation of trade secret complaint by an employer against a former employee in BTS USA v. Executive Perspectives, Superior Court, Waterbury, Docket No. X10-CV-116010685 (Oct. 16, 2014). The plaintiff, BTU USA, provides training and consulting services to corporate clients using learning maps, computer simulations and board games. The defendant, Executive Perspectives (“EP”), offers essentially the same services and products.

Marshall Bergmann, a former BTS Senior Director who had access to much of BTS’ ...