Trade Secrets & Employee Mobility

Social media has become an increasingly important tool for businesses to market their products and services. As the use of social media in business continues to grow, companies will face new challenges with respect to the protection of their confidential information and business goodwill, as several recent federal district court decisions demonstrate.

On April 6, 2012, Latham & Watkins was sued for malicious prosecution in Los Angeles Superior Court in connection with an unsuccessful lawsuit that the firm brought on behalf of one of its clients, asserting misappropriation of trade secrets and other claims.

An increasingly common type of provision found in employment agreements, allowing for extension of an employee's post-employment non-compete restrictions by a period of time that the employee violates the restrictions, was upheld in a recent decision by New York's Appellate Division, First Department.

The Supreme Court of Connecticut has ruled that a public agency, the University of Connecticut, can create and maintain trade secrets that are exempt from disclosure under the state's Freedom of Information Act.

You are cordially invited to attend EpsteinBeckerGreen's Complimentary Briefing/Webinar on April 18, 2012, regarding the Protection of Trade Secrets and Confidential Information in a Social Media Workplace.

In a recent decision, the Utah Court of Appeals broadly interpreted the preemption clause in the Uniform Trade Secrets Act ("UTSA") to hold that it "preempts claims based on the unauthorized use of information, irrespective of whether that information meets the statutory definition of a trade secret."

An updated version of our guide, "Non-Compete Laws: Illinois," is now available. It reflects the recent decision of the Second District of the Appellate Court of Illinois, Hafferkamp v. Llorca, which contains an important holding regarding standards for enforcing non-compete agreements in Illinois.

Emotions often run high in business disputes involving trade secrets. The case of Sean Morrison Entertainment v. Thompson, et al., which is pending in Chicago federal court, serves as a good reminder that emotions and the need for business leverage are no substitute for a good factual basis for claims.

Over a dozen years after the New York Court of Appeals specifically recognized, in BDO Seidman v. Hirshberg, that an employer may have a legitimate and protectable business interest in preventing former employees from exploiting or appropriating the relationships and goodwill of its customers which had been created and maintained at the employer's expense, some New York courts still appear to be reluctant to uphold contractual provisions in employment agreements that are designed simply to protect customer goodwill.

On January 23, 2012, the Canadian National Railway Company filed suit against its former Chief Executive Officer, E. Hunter Harrison, for allegedly violating certain non-compete and non-disclosure obligations. Peter A. Steinmeyer was interviewed about the lawsuit on the Business News Network's show, "Headline with Howard Green."