October 28, 2019
Rhode Island is the latest state to jump on the bandwagon of limiting the application of non-compete agreements, with its Rhode Island Noncompetition Agreement Act (the “Act”). See these links for our prior posts explaining the previous six non-compete statues enacted in 2019: Maine; Maryland; New Hampshire; Oregon; Utah; and Washington. Rhode Island’s Act becomes effective on January 15, 2020.
Ban on Non-Competes For “Low-Wage Earners”; “Nonexempt” Employees; Minors; and “Undergraduate or Graduate” Student Workers
October 25, 2019
A recently passed Florida law, Florida Statutes 542.336 seeks to prevent medical providers from using restrictive covenants to monopolize medical specialties in rural counties. The law bars the enforcement of “restrictive covenants” against physicians who practice “a medical specialty in a county wherein one entity employs or contracts with, either directly or through related or affiliated entities, all physicians who practice such specialty in that county.” Once a second provider enters the market for a particular specialty in a county, restrictive covenants remain unenforceable in that county for a period of three years.
October 11, 2019
A federal judge in Chicago recently held that an individual can be convicted of attempting to steal a trade secret, even if the information at issue did not actually constitute a trade secret, so long as the individual believed that the information was a trade secret.
In United States of America v. Robert O’Rourke Opinion, Judge Andrea R. Wood denied a post-conviction motion for a new trial in a case involving attempted and actual trade secret theft. The decision involved a metallurgical engineer and salesperson, Robert O’Rourke, who resigned his employment to take a position as vice president of research and development for a China-based competitor. Shortly before his last day, he entered his employer’s facility and downloaded over 1900 documents from its network onto a personal hard drive. His employer discovered this and alerted law enforcement, and O’Rourke was stopped by Customs and Border Patrol officials while attempting to board a flight to China with the hard drive containing the downloaded documents. At trial, he was convicted of actual and attempted trade secret theft.
October 7, 2019
I’m pleased to present the 2019 update to our “Trade Secrets Litigation” Practice Note, published by Thomson Reuters Practical Law. My co-author Zachary Jackson and I discuss litigation for employers whose employees have misappropriated trade secrets.
September 3, 2019
New York is known for having many protections for its employees in the workplace, but a long-standing legal doctrine can furnish a remedy to employers with regard to employees who engage in repeated acts of disloyalty during their employment. The “faithless servant doctrine” permits an employer to “claw back” an employee’s compensation when an employee is found to be disloyal to the employer. While the doctrine may seem antiquated, it continues to have vitality. For example, in March 2018, a New York appellate court confirmed an arbitration award that directed, based on the faithless servant doctrine, a former employee to pay Major, Lindsey & Africa, LLC nearly $2 million as disgorgement of her past salary and commissions on claims that she had stolen and divulged confidential information to competitors.
August 19, 2019
Peter A. Steinmeyer and David J. Clark, Members of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Chicago and New York offices, respectively, authored a Thomson Reuters Practical Law Q&A guide, “Non-Compete Laws: Illinois.”
July 31, 2019
With its recently passed Act Relative to Noncompete Agreements for Low-Wage Employees, New Hampshire has joined a growing list of states (including Maryland and Maine) that have enacted laws barring employers from enforcing non-competition agreements against low-wage workers. The New Hampshire law prohibits employers from enforcing agreements against employees earning less than 200% of the federal minimum wage ($14.50/hour as of 2019) which limit their ability to work for another employer for (1) a specific period of time (2) in a specific geographic area, or (3) in a specific industry. The prohibition takes effect September 8, 2019.
July 16, 2019
The recently passed Act to Promote Keeping Workers in Maine is poised to dramatically alter the status of restrictive covenants in Maine. The Act accomplishes this by: (1) prohibiting employers from entering into no-poach agreements with one another; (2) barring employers from entering into noncompetes with lower wage employees; (3) limiting employers’ ability to enforce noncompetes; (4) mandating advanced disclosure of noncompete obligations; and (5) imposing a time delay between when an employee agrees to the terms of a noncompete and when the noncompete obligations actually go into effect. In addition to barring the enforcement of noncompliant noncompetes, the Act authorizes the Maine Department of Labor to impose monetary civil fines of “not less than $5,000” on employers who enter into non-complaint agreements. The Act apples to contracts entered into or renewed after September 18, 2019, so Maine employers should not waste time in revising their agreements to comply with the Act.
July 15, 2019
California, the Golden State, is a special place to live and work. However, if you are an employer in California, you have most likely heard warnings of what you cannot do in terms of protecting your workforce and trade secrets and preventing unfair competition. While the rules of the road are different in California, employers are not without tools to protect their resources. And those tools are the focus of this program: what you can do to protect your workforce and trade secrets in California.
June 28, 2019
The 2019 legal landscape of employee mobility continues to evolve, at times drastically. Courts and legislatures are giving increased scrutiny to employers’ claims to protect the confidentiality of their trade secrets and attempts to enforce their employees’ restrictive covenants, including non-competition and non-solicitation agreements. It can be hard for employers to prevent their confidential information and client goodwill from following certain departing employees.
With greater knowledge of the latest legal theories, decisions, statutes, and other developments in this area, employers can better protect and defend their interests—even preemptively—including in the ways they draft their employee agreements, design their compensation structures, and consider whether and when to engage in litigation.
This issue of Take 5 aims to provide a few tools for deciphering and navigating this changing employee mobility landscape.