Trade Secrets & Employee Mobility

As featured in #WorkforceWednesday:  New York State’s noncompete ban has passed both houses of the state legislature and now awaits Governor Kathy Hochul’s signature.

Epstein Becker Green attorney David J. Clark details how this proposed ban would affect employers and reveals how noncompete bans have become a growing trend throughout the country.

As featured in #WorkforceWednesday:  There has been a wave of legislation restricting non-compete agreements in the states, as well as a focus on such agreements at the federal level.

The continued shift towards remote work has also complicated non-competes.

How do employers maintain compliance? Attorney Erik Weibust tells us more.

As featured in #WorkforceWednesday:  This week, we look at the restriction and legislation of non-compete agreements.

The Future of Non-Compete Agreements

The restriction and legislation of non-compete agreements is gaining traction around the country, with states and the federal government passing or proposing new restrictions on the clauses. In July, President Biden signed an executive order that discussed the regulation of non-compete agreements, which in the past has only been the province of the states. Attorneys Pete Steinmeyer and Brian Spang discuss how the ...

In its new podcast series, Employment Law This Week has released an extended Monthly Rundown, discussing some of the most important developments for employers in June 2019.

This episode includes:

• Worker Classification in the Gig Economy
• NLRB Announces Rulemaking Agenda
• National Backlash Builds Against Non-Compete Agreements
• Tip of the Week: Compliance with New Jersey’s Equal Pay Act

Stay tuned: Listen to the latest episode on our website or on your preferred platform – iTunes, Google Play, Soundcloud, or Spotify – be sure to subscribe!

Featured on Employment Law This Week: NJ Senate Advances Ban on Sex Harassment Confidentiality Agreements.

The New Jersey Senate wants no more secrecy around harassment claims. On a 34-to-1 vote, the chamber approved legislation banning

involving sexual harassment claims. The bill is still pending in the House, where a vote is expected in the next few weeks. The legislation would also allow victims to keep their identities confidential and would establish jurisdiction in Superior Court, arguably bypassing arbitration agreements.

Watch the segment below.

Featured on Employment Law This Week:  No relief is expected from the Trump administration on anti-poaching agreements.

2016 guidance from the DOJ and FTC put employers on notice that agreements between companies not to poach employees, or to limit the compensation paid to some employees, could violate antitrust laws. There had been some speculation that President Trump’s DOJ would back away from this policy, but recent comments by the Assistant Attorney General for the Antitrust Division indicated that new administration will support the policy, and promised several ...

Featured on Employment Law This Week - An Illinois appellate court weighs in on social media and solicitation. The case involved a defendant who sent LinkedIn connection requests to three former coworkers, even though he had signed a non-solicit agreement. In considering whether social media activity violates non-solicitation agreements, other courts have drawn a distinction between passive social media activity and more active, direct activity. Though these requests were made directly to the former coworkers, the court in this case ruled that the content constituted ...

The year-end episode of Employment Law This Week  looks back at the biggest employment, workforce, and management issues in 2016.

Our colleague Jonathan Shapiro discusses the impact of the Defend Trade Secrets Act (DTSA)—which opened federal courts to trade secrets claims, regardless of the dollar value—and the White House's call to action encouraging states to ban non-compete agreements in some circumstances.

Watch the segment below and read Epstein Becker Green's recent Take 5 newsletter, "Top Five Employment, Labor & Workforce Management Issues of 2016."

The top story on Employment Law This Week:  The White House is calling on states to combat what it describes as the “gross overuse of non-compete clauses today.”

The call to action recommends legislation banning non-competes for certain categories of workers and prohibiting courts from narrowing overly broad agreements. New York Attorney General Eric Schneiderman answered the call immediately, announcing that he would introduce relevant legislation in 2017. Our colleague Zachary Jackson, from Epstein Becker Green, comments.

Watch the segment below and see our blog post ...

The top story on Employment Law This Week: The DOJ intends to investigate anti-competitive trade practices.

The Department of Justice and the Federal Trade Commission released joint guidance for HR professionals on how antitrust laws apply to employment. The guidance explains that agreements among employers not to recruit certain employees—or not to compete on terms of compensation—are illegal. Notably, the DOJ announced that they plan to criminally investigate “naked no-poaching or wage fixing agreements” that are unrelated to legitimate collaboration between ...

Featured on Employment Law This Week: An employer cannot waive its own non-compete agreement to avoid payment, unless the agreement specifically grants it the right to do so.

An employee of a financial services firm in Illinois signed an agreement that required a six-month post-employment non-competition period in exchange for $1 million from his employer. When the worker resigned, the employer sent a notice waiving the agreement and telling the employee that it would not pay him the $1 million. After waiting out the six months, the employee filed suit against his former employer ...

Featured in the top story on Employment Law This Week:  Former employees turned competitors in Pennsylvania are hit with $4.5 million in punitive damages.

An insurance brokerage firm sued a group of employees, claiming that they violated their non-solicitation agreements by luring away employees and clients to launch a new office for a competitor. A lower court awarded the firm nearly $2.4 million in compensatory damages and $4.5 million in punitive damages because of the defendants’ outrageous conduct. On appeal, the appellate court agreed and upheld all damages.

See the ...

David Clark, contributor to this blog and Senior Counsel at Epstein Becker Green, is featured on Employment Law This Week, discussing the Defend Trade Secrets Act of 2016 (DTSA).

Under the DTSA, employers can now sue in federal court for trade secret misappropriation. Though there is some overlap with the Uniform Trade Secrets Act—adopted in some version by 48 states—the DTSA marks a notable change in how these cases are litigated, creating a federal civil cause of action. The new law contains broad whistleblower protections and new requirements for employers to give notice ...

Peter Steinmeyer, co-editor of this blog, is featured in the top story on Employment Law This Week.

As the story explains, the U.S. Court of Appeals for the Sixth Circuit has upheld a ruling that a group of workers at a fastener company used confidential drawings from the company to design, manufacture, and sell competing parts for their new business venture. On appeal, the former workers argued that they were “filling a gap” for customers, not competing with the original company. But the Sixth Circuit found that this argument ignored undisputed evidence in the case.

Mr ...

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 ...

One of the top stories on Employment Law This Week – Epstein Becker Green’s new video program – is about a bad leaver and the hefty price he had to pay.

A former VP of Fortinet, Inc., must pay nearly $1.7 million to the company, after poaching three of his subordinates when he left his job for a competitor. The former VP joked in an email that the employees he took with him were “three bullets to the back of the head” of his former employer. In the arbitration, a former California state judge ruled that the employee had breached his fiduciary duty and his contractual obligations not to ...

One of the top stories on Employment Law This Week – Epstein Becker Green’s new video program – is the Fifth Circuit’s ruling that a Texas bank cannot enforce non-compete agreements signed by four former employees based in Oklahoma, where courts do not recognize the pacts, because the agreements would violate Oklahoma's strong public policy favoring worker mobility. The fundamental law of the state trumped the choice of law.

See below to view the episode or read more about this important decision in an earlier post on this blog.