Tag Archives: trade secrets

Massachusetts Establishes Garden-Leave-Type Non-Compete Requirements and Limits

On August 10, 2018, the Governor of Massachusetts signed “An Act relative to the judicial enforcement of noncompetition agreements,” otherwise known as The Massachusetts Noncompetition Agreement Act, §24L of Chapter 149 of the Massachusetts General Laws. (That bill was part of a large budget bill, H. 4868, available here; the text of the provisions relevant here at pages 56-62 of the bill as linked). The Act limited non-competition provisions in most employment contexts to one-year and required employers wishing to enforce such a one-year period to pay their ex-employees for the time that such employees are sidelined. The Act also precluded enforcing such provisions against employees laid-off or terminated without cause or against employees classified as non-exempt under the Fair Labor Standards Act. These and the other requirements noted below become effective and apply to employee noncompetition agreements entered into on or after October 1, 2018, and the Act curiously contains some significant exceptions as well. Below we will highlight material aspects of the new law, which was recently featured on Employment Law This Week.

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New York Court Limits Scope of Damage Awards in Trade Secret Actions

In E.J. Brooks Company v. Cambridge Security Seals, the Court of Appeals of New York narrowed the scope of permissible damage claims plaintiffs can assert in trade secret actions under New York law. The ruling denies plaintiffs the ability to recover costs that defendants avoided through misappropriating trade secrets (known as “avoided costs” theory), making New York law less attractive to certain types of trade secret actions due to the state’s conservative approach in calculating damages.

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State Attorneys General Investigating Use of Non-Competes by Fast Food Franchisors

On Monday, attorneys general in eleven states, including New York, New Jersey, Massachusetts, California, and Illinois, revealed that they are investigating several prominent fast food franchisors for their potential use of no-poaching or non-compete agreements restricting the ability of low wage workers to obtain a better-paying job with another franchise. To that end, these attorneys general have propounded document and information requests to these restaurants, returnable August 6, 2018.

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7th Circuit Shows Zero Tolerance for Dishonesty or Disrespect in Recent Trade Secrets Case

Following what it described as a three year “one-man legal circus,” a Seventh Circuit panel recently affirmed a sanction award of over $440,000 in a trade secret misappropriation case, after finding that the defendant, Raj Shekar, “demonstrated nothing but disrespect, deceit, and flat-out hostility[.]” Teledyne Technologies Incorporated v. Raj Shekar, No. 17-2171, 2018 U.S. App. LEXIS 17153, at *13 (7th Cir. June 25, 2018).

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Non-Compete Laws Affecting Health Care Professionals in Various U.S. Jurisdictions

Many physicians and other health care workers are familiar with restrictive covenants like non-competition and/or non-solicitation agreements, either as employees who have been asked to sign such covenants as a condition of their employment or as business owners seeking to enforce such covenants to protect their medical practices from competition. These covenants are usually designed to prohibit physicians or other practitioners from leaving and setting up a competing practice nearby using patient contacts, information, and/or training that they received during their employment or association with the former employer.

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The Catch-22 Of Litigating Your Trade Secrets Case Without Revealing The Secrets Themselves

 

 

 

 

 

 

Jim Flynn, an attorney in Epstein Becker & Green’s Newark, New Jersey office, recently addressed in separate forums the delicate balance that trade secret owners and their counsel must strike when litigating over trade secrets and confidential information. First, Mr. Flynn moderated a panel discussion among trade secret litigators (including one from Beijing) at the American Intellectual Property Law Association (“AIPLA”) Spring Meeting in Seattle, Washington. His May 16th AIPLA session was entitled “A Litigator’s Guide to Protecting Trade Secrets During Litigation,” and program materials included his written paper on the Catch-22 aspects noted above. Additionally, Mr. Flynn published on May 23, 2018 an International Lawyers Network IP Insider article entitled The Catch-22 Of Litigating Your Trade Secrets Case Without Revealing The Secrets Themselves that addressed these topics in further detail.   As he pointed out in that article:

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New Jersey Seeks To Limit Use of Non-Competes

On May 10, 2018, the New Jersey Assembly Labor Committee advanced Assembly Bill A1769, a bill that seeks to provide stricter requirements for the enforcement of restrictive covenants.

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Non-Competes Continue to Face Political Headwinds

 

Legislative efforts to limit or ban the use of non-compete provisions in employment agreements have proliferated in the early months of 2018.

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ILN Today Post

Arkansas Appellate Decision Bolsters Enforceability of Non-Competes

A recent decision from an Arkansas appellate court raises two important issues of enforceability of non-competition agreements: (1) the enforceability of a non-compete after expiration of the contractual non-compete period and (2) the applicable standard for determining whether a valid protectable interest exists.

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Arkansas Appellate Decision Bolsters Enforceability of Non-Competes

A recent decision from an Arkansas appellate court raises two important issues of enforceability of non-competition agreements: (1) the enforceability of a non-compete after expiration of the contractual non-compete period and (2) the applicable standard for determining whether a valid protectable interest exists.

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