In a question of first impression, the Illinois Appellate Court recently addressed what constitutes “bad faith” for purposes of awarding attorneys’ fees to the prevailing party under §5 of the Illinois Trade Secret Act (ITSA). That section provides, in pertinent part, that if “a claim of [trade secret] misappropriation is made in bad faith” or

Federal district judges in Chicago are now split over whether to follow the Illinois appellate court’s landmark non-compete decision, Fifield v. Premier Dealer Services, Inc., 373 Ill. Dec. 379, 993 N.E. 2d 938 (Ill. App. 1st Dist. 2013).
Continue Reading Federal District Judges In Chicago Are Now Split Over Whether To Follow The Illinois Appellate Court’s Landmark Fifield Decision

In what turned out to be a disastrous result for defendants, a Massachusetts Court issued a default judgment against certain salespeople who left their former company to form the new competing company. The default judgment was based on the defendants’ conduct during the discovery phase of the case, in which they failed to follow the terms of the Court’s Preliminary Injunction, including misrepresenting their compliance to the Court, destroying evidence, and using confidential information to sell products to certain businesses, all of which was specifically barred by the terms of the Court’s Order.
Continue Reading Failure To Follow The Court’s Preliminary Injunction In A Trade Secrets Case Results In Default

Judge Ruben Castillo, the Chief Judge for the United States District Court for the Northern District of Illinois, recently declined to follow a widely publicized Illinois Appellate Court decision in which the Appellate Court held that, absent other consideration, two years of employment is required consideration for a restrictive covenant in Illinois.
Continue Reading Chief Federal District Judge In Chicago Declines To Follow Illinois Appellate Court Holding That, Absent Other Consideration, Two Years Of Employment Is Required Consideration For A Restrictive Covenant

The high profile lawsuit filed on February 11, 2014 by Anschutz Entertainment Group against Shervin Mirhashemi and his new employer, Legends Hospitality, LLC, again raises the question of when a California Court of Appeal will decide whether employee non-solicits are enforceable in California.
Continue Reading The Enforceability Of Employee Non-Solicits Remains Unclear In California

California Courts have discretion to award attorneys’ fees to a prevailing defendant in a trade secrets action where the commencement or continued prosecution of a trade secrets action is in bad faith. A recent decision underscores that a plaintiff pursuing a trade secret claim in California must be careful that it can actually identify with some particularity what trade secrets have been misappropriated.
Continue Reading Failure To Define Trade Secrets Establishes Subjective Bad Faith For Attorneys’ Fees Award Under CUTSA

Although California has a strong public policy, based on Cal. Bus. & Prof. Code § 16600, against the enforcement of employer/employee non-compete agreements, employers might get some traction in this area by including a choice of venue or forum selection provision in their employment contracts and – through that provision – having the case transferred to a jurisdiction that will be more likely to enforce a restrictive covenant.
Continue Reading California Federal Courts Enforce Forum Selection Clauses in Non-Compete Litigation

A federal judge in Chicago recently wrestled with two issues that we frequently blog about: what constitutes misappropriation of confidential information, and to what extent can a current employee prepare to compete with his employer without breaching his fiduciary duty?
Continue Reading Requested Injunction Against Former Flight Instructor Crashes At Take-Off

In California, a non compete given in return for the sale of a business’ goodwill is one of the few exceptions to the state’s broad prohibition against non competes. In Fillpoint, LLC v Maas, a California appellate court narrowly construed the exception and invalidated a non compete/non solicit agreement contained in an employment agreement which was signed in connection with the sale of goodwill.
Continue Reading California Court Invalidates Non Compete Tied to the Sale of Goodwill