Below is a short supplement to March’s update on issues and cases making trade secrets | noncompete news. The developments are as follows…
Federal: The Senate vote on the Defend Trade Secrets Act (S. 1890) is scheduled for April 4. For more, see Changing Trade Secrets | Noncompete Laws.
Idaho: On March 17, 2016, the Idaho Senate Committee favorably reported out House Bill 487, a bill that would amend Idaho noncompete law by limiting noncompetes (supported only by employment or continued employment) to 18 months and creating certain pro-enforcement presumptions. For more, see Changing Trade Secrets | Noncompete Laws; Idaho bill strengthening noncompete contracts advances.
Illinois: On March 10, siding with the majority of United States District Court of Illinois judges, another United States District Court judge in Illinois (Judge Robert Gettleman in R.J. O’Brien & Assoc., LLC v. Williamson) rejected the controversial requirement in Fifield v. Premier Dealer Services, Inc., 993 N.E.2d 938 (Ill. App. Ct. 2013), that a noncompetition agreement must be supported by at least two years of employment.
North Carolina: On March 18, the Supreme Court of North Carolina, in Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, reiterated its long-standing “strict blue pencil” approach “under which a court cannot rewrite a faulty covenant not to compete but may enforce divisible and reasonable portions of the covenant while striking the unenforceable portions.” The court stated its rationale as follows:
Allowing litigants to assign to the court their drafting duties as parties to a contract would put the court in the role of scrivener, making judges postulate new terms that the court hopes the parties would have agreed to be reasonable at the time the covenant was executed or would find reasonable after the court rewrote the limitation. We see nothing but mischief in allowing such a procedure.
Thank you to Jon Wall for posting the case in the LinkedIn Noncompete Lawyers group.
Please note that the most current version of both the 50 State Noncompete Chart and 50 state and federal survey chart of trade secret laws can always be found on my firm’s resources page.