Trade Secrets & Employee Mobility

A federal judge in Chicago recently refused to issue an injunction based upon either the "inevitable disclosure" of trade secrets doctrine or a geographically broad, 24-month non-compete that did not have a narrowly drawn activity restriction.

On Monday, January 9, 2012, Governor Chris Christie signed into the law the New Jersey Trade Secrets Act (NJTSA), the Garden State's version of the Uniform Trade Secrets Act (UTSA). New Jersey, thus, becomes the forty-seventh state to adopt some form of UTSA. While the New Jersey Act will promote some level of uniformity in the approach to trade secrets issues, New Jersey specific changes to the uniform act promise that this statute will build upon, rather than depart from, New Jersey's common law tradition of protection of trade secrets and other valuable business information.

In a recent New York case, a commercial insurance broker whose business and employees had been raided on a substantial scale by a former employee and competitor was awarded a preliminary injunction barring the former employee, the competing company, and certain other former employees from soliciting business from the broker's clients, and from soliciting other employees of the broker to join the competitor. The Court's finding of irreparable harm was premised on reputational harm and loss of confidence in the marketplace suffered by the broker due to the perception that the broker was badly "wounded" by the extent of the raid.

The U.S. Court of Appeals for the Eighth Circuit recently held that compilations containing only minimal secret information nevertheless qualified for trade secret protection because the substantial investment involved in preparing them gave their owner a competitive advantage and because the owner undertook reasonable efforts to maintain their secrecy by labeling them with a proprietary legend and only distributing them to parties which signed a confidentiality agreement.

An updated version of our guide, "Non-Compete Laws: Illinois," is now available. It reflects the recent decision of the Illinois Supreme Court in Reliable Fire Equipment Company v. Arredondo, et al., which resolved several years of confusion over the appropriate standard for enforcing non-compete agreements in Illinois.

On December 1, 2011, the Illinois Supreme Court issued its opinion in Reliable Fire Equipment Company v. Arredondo, et al., which resolved several years of confusion over the appropriate standard for enforcing non-compete agreements in Illinois.

Several attorneys from the national law firm of EpsteinBeckerGreen contributed to the December 2011 issue of the Practical Law Company's "Labor and Employment."

A recent decision by the Supreme Court of Virginia reaffirmed that a non-compete agreement will likely be enforceable if it is narrowly drawn to protect the employer's legitimate business interest.

A recent opinion from the Court of Appeal of the State of California First Appellate District demonstrates that before a litigant moves to compel trade secret information which it deems critical to its prosecution or defense of a claim, it must fully develop the trial court record and present particularized evidence to establish why the information is relevant and necessary.

A recent opinion from the Supreme Court of Kansas held that multiple jury instructions which had led to a verdict for a plaintiff asserting claims of trade secret misappropriation and breach of certain restrictive covenants were erroneous, and accordingly reversed the jury verdict and remanded the action back to the trial court.