Category Archives: Trade Secrets

Trade Secrets Laws and the UTSA – A 50 State and Federal Law Survey Chart (revised)

World MapEvery state but Massachusetts and New York has adopted the Uniform Trade Secrets Act (the UTSA) in one form or another – though some may quibble with whether Alabama or North Carolina actually adopted it. (The Uniform Law Commissioners say that Alabama has adopted it, while North Carolina has not; I view the results as largely the opposite.)

For several years, I had been planning to run a redline comparison of each state’s trade secrets laws against the Uniform Trade Secrets Act to see the full scope of the variation. The task was quite substantial, however, and I never quite felt that it would be worth the time.

In the past, there had been plenty of articles discussing the variations in UTSA formulations among the state laws purporting to adopt the Act, including Linda B. Samuels and Bryan K. Johnson‘s, The Uniform Trade Secrets Act: The States’ Response, 24 Creighton Law Rev. 49 (1990), and  Christopher Rebel J. Pace‘s, A Case for a Federal Trade Secrets Act, 8 Harvard Journal of Law & Technology 427 (1995), but no one had done an actual side-by-side comparison of how each state’s law compared to the UTSA.

More recently, Sid Leach wrote another terrific article summarizing the significant variations among state “uniform” trade secrets laws. Sid’s article highlighted for me the need to have – and the continuing interest of others in having – a comparison. It convinced me that it was time for such a chart.

So, I made it. It took well over a hundred hours of combined effort, starting with the yeoman’s work my firm’s then-summer intern, David Haber, and dozens of hours of my time organizing, revising, and problem-solving with David and with with my paralegal, Erika Hahn, who separately spent many hours working on the chart. The chart could not have been completed without their extraordinary contributions.

It is a state-by-state comparison (as close to a redline comparison as made sense) of every state’s trade secrets laws (and the Economic Espionage Act, as amended by the Defend Trade Secrets Act of 2016) to the 1985 version (i.e., the most recent version) of the Uniform Trade Secrets Act.

The chart is viewable here. (It was originally prepared on August 14, 2016, and has been updated; it is current as of today, February 4, 2017.)

It is intended both as a stand-alone resource and a companion to our 50 state survey chart of noncompete laws, which I first prepared almost seven years ago (in the summer of 2010), though I regularly update it to reflect the changing noncompete laws around the country. (It is also current as of today, February 4, 2017.)

In addition, for a comprehensive summary of recent trade secrets and noncompete legislative reforms and efforts at reform around the country, please see the page Changing Trade Secrets | Noncompete Laws. Be sure to check back from time to time, as I regularly update it to reflect new developments.

Trade Secret and Noncompete Survey – National Case Graph 2017

noncompete-and-trade-secret-cases-survey-graph-20170111As regular readers of this blog know, several years ago, I became curious to see how many reported trade secret / noncompete decisions were issued each year in all federal and state courts around the country. So, I did a “back of the envelope” calculation. I have performed similar calculations every year since.

The graph shows three things: (1) the blue bars show all reported noncompete decisions; (2) the red bars show all reported trade secrets decisions; and (3) the yellow bars show all decisions involving noncompetes or trade secrets or both.

I should note that  each time I’ve run the queries, the results for each year have varied slightly (inching up over time), which I attribute to Westlaw’s addition of cases over time. Consistent with that, the older the data, the less it moves. Indeed, the oldest data didn’t change at all.

The other thing worth noting is that every time I’ve run this inquiry at the beginning of the year (as is the case this time), the most recent year has been way underreported. I suspect that it has something to do with how Westlaw updates its database. I will very likely run my search again later in the year, and, if history is any predictor, the 2015 and 2016 numbers will be significantly higher. We will see!

Perhaps most telling is that while noncompete litigation has been relatively static, trade secrets litigation has increased every year, with the sole exception of (preliminarily) 2015 and 2016 – though that result will likely turn out to be an artifact of the Westlaw database issue. In fact, last year, there was a slight dip in the number of cases in 2012; however, after updating the numbers this year, the dip disappeared.

If you’d like to take a closer look at the numbers, you can click the image above or here.

Massachusetts Noncompete and Trade Secret Reform Returns

IMG_0017After years of trying (8, to be precise – the first bills were filed, virtually simultaneously as it turned out, by Representative Lori Ehrlich and then-Representative (now Senator) Will Brownsberger for the legislative session starting January 2009), a new noncompete bill was filed on Friday, January 20:  An Act relative to the judicial enforcement of noncompetition agreements (Senate Docket No. 1578).

The new bill – covering both noncompetes and the related issue of trade secrets – picks up where the House and Senate left off last legislative session, albeit with a few tweaks and clean-ups. (Please contact me if you would like a redline.)

From a big picture standpoint, the bill:

  • Limits noncompetes (generally) to 12 months.
  • Requires advance notice.
  • Requires consideration beyond continued employment for post-hire noncompetes.
  • Includes express legislative authorization for a springing noncompete.
  • Requires the red pencil approach to an overly-broad noncompete, although it tempers that approach by permitting reformation if the agreement is written to comply with the safe-harbors set out in the statute.
  • In substance, tracks the Uniform Trade Secrets Act, with tweaks previously submitted by Steve Chow on behalf of the Uniform Law Commissioners and a handful of changes that I had made a few years ago as well as for this latest version. Most substantively, this latest version clarifies that the “threatened misappropriation” that can be enjoined “upon principles of equity” is intended to reflect the inevitable disclosure doctrine. (There has been a significant amount of discussion around when the inevitable disclosure doctrine would apply; general consensus is that the doctrine is a very narrow one, intended to prevent wrongful conduct, rather than mere innocent misappropriation.)

Other important aspects of the noncompete section of the bill (in the order they appear in the bill):

  • It applies only to employee noncompetes. It does not apply to other types restrictive covenants, including, most significantly, nonsolicitation agreements, anti-piracy/no-raid agreements, noncompetes made in connection with the sale of business, confidentiality agreements, or noncompetes that are part of a severance agreement provided that the employee “is expressly given 7 business days to remind acceptance . . . .”
  • The agreement must be in writing, signed by both parties.
  • The agreement must “expressly state that the employee has the right to consult with counsel prior to signing.”
  • The advance notice requirement (for noncompetes entered into in connection with the commencement of employment) is “the earlier of a formal written offer of employment or two weeks before the commencement of the employee’s employment; provided, however, that an employee may waive this two-week requirement if the employer and the employee plan for the employee to commence employment in less than two weeks from the date of the formal written offer of employment and the waiver is expressly stated in the noncompetition agreement.”
  • For noncompetes entered into after the commencement of employment, notice must be given at least 10 days before the agreement becomes effective and the noncompete must “be supported by consideration independent from the continuation of employment . . . .”
  • The employer must review the noncompete with the employee at least once every three years.
  • Legitimate business interests are the employer’s: (i) trade secrets; (ii) confidential information; and (iii) goodwill. (This is not a change from existing common law, except insofar as existing law may permit other interests to be protected.)
  • A noncompete “may be presumed necessary where” other restrictive covenants are insufficient, including “because the employee breached” one of those agreements. It may also be presumed necessary where the employee took property of the employer or breached a fiduciary duty to the employer.
  • Noncompetes are limited to (and presumptively reasonable if they are no more than) 12 months – unless the employee has breached his or her fiduciary duties or has taken property, in which case, the term is limited to two years.
  • The noncompete must be reasonable in geographic scope. (This is the same as existing common law.) If the geographic reach is limited to only the “areas in which the employee, during any time within the last 2 years of employment, provided services or had a material presence or influence” it will be presumptively reasonable.
  • The agreement must “be reasonable in the scope of proscribed activities in relation to the interests protected. (This is the same as existing common law.) A restriction on activities that protects a legitimate business interest and is limited to only the specific types of services provided by the employee at any time during the last 2 years of employment is presumptively reasonable.”
  • The employer has 10 days following the end of the employee’s employment to notify the employee in writing by certified mail that the employer intends to enforce the noncompetition agreement. This requirement does not apply if the employee has unlawfully taken property or already breached the noncompete, a nonsolicit, an anti-piracy/no-raid covenant, a confidentiality agreement, or a fiduciary duty.
  • The agreement must be consonant with public policy. (This is the same as existing common law.)
  • The agreement will not apply to:
    • employees who are not exempt under the Fair Labor Standards Act, 29 U.S.C. sections 201-209;
    • undergraduate or graduate students engaged in short-term employment;
    • employees terminated without cause or laid off;
    • employees who are 18 or under; and
    • non-employees who perform services for less than one year.
  •  An overly-broad noncompete is subject to invalidation under the red pencil approach (which applies only to the noncompete, not the rest of any agreement that may include the noncompete). However, if the agreement is written to comply with the safe-harbors set out in the statute, a court may reform the agreement. (That concept is to force companies to draft noncompetes narrowly, while not imposing the same penalty on a company that attempted to draft narrowly. This modified red-pencil approach was dubbed the “purple pencil” by former Senator Wolf.)
  • The court may impose a noncompete as a remedy for the violation of another restrictive covenant or a statutory or common law duty. (This is called a “springing noncompete” – it was an idea that I created for some clients who preferred to not use noncompetes except when an employee has acted unlawfully; accordingly, it imposes less restrictions on the employee unless and until the employee engages in unlawful behavior, thus demonstrating that the employee cannot be trusted to comply with the less onerous restrictions.)
  • Massachusetts law will apply if the employee is a resident of, or has been working in, Massachusetts for at least 30 days.
  • Jurisdiction lies in the county of the employee’s residence or Suffolk county (if the agreement so provides).

What should you be doing now to prepare? Nothing. Changes are still a long way off. However, you do need to understand the changes when they happen, and will need to be prepared to help you consider changes to your agreements.

 

Aleynikov not-free at last!

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By Rainerzufall1234 (Own Work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)%5D, via Wikimedia Commons

Updated 1/26/2016

After years of legal wrangling, Sergey Aleynikov, the former Goldman Sachs engineer who stole high frequency trading code from Goldman Sachs and took it with him for use at Teza Technologies LLC, was finally “re-“convicted according to Bloomberg (and others).

You may recall that Aleynikov was first convicted under the Economic Espionage Act (the “EEA”), but that that decision was overturned by the Second Circuit in  US v. Aleynikov, 676 F.3d 71 (2nd Cir. 2012). (That decision precipitated the adoption on December 28, 2012, of the Theft of Trade Secrets Clarification Act of 2012, which expanded the reach of the EEA. For more, see here.)

Nevertheless, Aleynikov also faced prosecution in state court.

There, the results were the opposite: the trial court found him not guilty, and the New York Supreme Court Appellate Division reversed, observing that “[i]t would be incongruous to allow a defendant to escape criminal liability merely because he made a digital copy of the misappropriated source code instead of printing it onto a piece of paper.”

Update (1/26/2016): If you would like the read the decision (The People of the State of New York v. Sergey Aleynikov, Docket No. 4447/12 (Jan. 24, 2016)), it is available at Brooklyn Law’s Trade Secrets Institute’s website here.

Upcoming Trade Secrets Seminars

Hello all, just a quick note, depending upon where you are located, there are a few upcoming trade secret related presentations that are worth attending. (In the interest of full disclosure: I am involved in all of them – but despite that, the other speakers are all terrific and the content should be great.)

The presentations are:

17th Annual Intellectual Property Year in Review – The Changing IP Landscape, Boston Bar Association in Boston, Massachusetts, on January 26.

The Defend Trade Secrets Act: Following the White House’s Call to Action, CLE International in Denver, Colorado, on February 24.

AIPLA 2017 Trade Secret Law Summit: Emerging Standards During Tumultuous Times, American Intellectual Property Law Association, in Atlanta, Georgia, on March 2-3.

Join us!

 

BRR 50-State Noncompete Chart (Updated 11/11/2016)

World MapThe BRR 50 State Noncompete Chart has been updated to reflect several recent state law developments (in particular, limits on physician noncompetes in Connecticut, New Hampshire, and Rhode Island).

Click here to get the latest version.

Please note that the chart has been revised through today, November 11, 2016.

Also, if you are looking for our 50 State Trade Secrets Comparison Chart, it is updated and available here.

Trade Secret | Noncompete Issues and Cases in the News (Through November 6)

extras_03Below are the latest issues and cases making trade secrets | noncompete news since our last update. There’s a lot to catch up on (sorry!) …

Remember that the Changing Trade Secrets | Noncompete Laws is updated regularly to reflect (in as close to real time as possible) the changes and proposed changes to trade secrets laws and noncompete laws around the country. 

Also remember that, if you want to see the differences among how each of the 50 states handle noncompetes and trade secrets, charts for those comparisons are available here (noncompetes) and here (trade secrets). Note that these charts are updated as new developments arise.

Federal:  The White House has been busy this year trying to find the appropriate balance between protecting trade secrets (see Defend Trade Secrets Act versus the UTSA) and limiting the abuse of overreaching noncompetes (see White House Releases Noncompete Call to Action).

I was honored to be invited by the White House to be a part of its working group discussions. What I can say is that, despite the vocal criticism from both sides (from the White House went too far to it didn’t go far enough), the White House considered substantial amounts of information from myriad sources and made great efforts to find a compromise. If nothing else, the fact that the White House has brought the question of the appropriate balance to an open discussion is unquestionably a good first step.

And, of course, a lot of work still needs to be done. There is a small but growing body of research on the impacts of noncompetes. All but the irrational “true believers” would agree that much more work needs to be done to have a proper understanding of how the use of noncompetes – broadly to narrowly to not at all – relates to innovation, employee training and wages, and myriad other potential impacts on the success of corporate growth and the economy. As that work moves forward, it will be interesting to see whether the opinions expressed by Jonathan Macey (Sam Harris Professor of Corporate Law, Securities Law and Corporate Finance at Yale Law School and a professor in the Yale School of Management) in Obama’s Pitch to Ban Non-Compete Agreements Would Make the Rich Richer are ultimately supported by empirical data.

As a separate but related observation, it is interesting to see that tech companies are moving to Boston (not Silicon Valley – the location often held up to show the alleged benefits that resulted from California’s general refusal (at least since Edwards vs. Arthur Andersen) to enforce noncompetes). See Why these tech execs moved their companies to Boston and Here Are Some of the Boston Tech Cos. Supporting the Campaign Against Noncompete Reform and Here Are the Most Innovative States in America. (See also a July 12, 2016, letter issued by the Massachusetts High Technology Counsel in opposition to some of the proposed Massachusetts legislation.) 

The bottom line is that most people who dig into the issue recognize that there is simply not enough information or research to make definitive conclusions on the overall relative benefits and detriments of noncompetes. Accordingly, at this point, decisions will have to be made based on whether people believe corporate interests or employee mobility should prevail and visceral reactions (pro or con) to the use of noncompetes. 

Federal:  On the theme of cracking down on noncompetes and related employment issues, the Department of Justice Antitrust Division and the Federal Trade Commission together issued “Antitrust Guidance for Human Resource Professionals,” taking aim at, among other things, inter-company no-poach agreements.

Federal:  On September 2, a complaint was filed with the NLRB challenging Trump’s requirement that all vendors – and their employees – agree to (among other restrictions) the following noncompete (exhibit A to the complaint):

Until the [November 8, 2016 or (if applicable) the date Trump withdraws his candidacy] you promise and agree not to assist or counsel, directly or indirectly, for compensation or as a volunteer, any person that is a candidate or exploring candidacy for President of the United States other than Mr. Trump and to prevent your employees from doing so.

While noncompetes are not unusual in these contexts, the challenge stems primarily from the fact that the restriction applies not just to the vendors, but to their employees. See Trump campaign contract has unusually broad non-compete clause.

Federal (4th Circuit):  Although nothing particularly new, the 4th Circuit (in RLM Communications, Inc. v. Tuschen) weighed in on noncompetes in North Carolina, observing that the prohibition on engaging in a competitive business meant not only that the former employee could not engage in a truly competitive role risking harming the former employer’s legitimate business interests, but the employee “may also not mow their lawns, cater their lunch businesses, [or] serve as their realtor.” Like the (like the so-called “janitor rule,” the court found that this was too much – and because North Carolina follows the blue-pencil the noncompete could not be narrowed in a way that would render it enforceable. For more, see Fourth Circuit’s RLM Communications, LLC v. Tuschen Tackles Noncompetition and Trade Secret Misappropriation Issues.

Federal (5th Circuit):  The 5th Circuit issued a decision on September 7, again finding that the Copyright Act does not preempt trade secrets protection for software. GlobeRanger Corp. v. Software AG.

Federal (9th Circuit):  Adoption of the Uniform Trade Secrets Act is, as  Sid Leach observed (in a terrific article), anything but uniform. See also my state-by-state comparison of the UTSA. However, the one thing that is uniform is that the trade secret owner must take reasonable measures to protect its purported trade secrets. The area of some controversy is what constitutes reasonable measures.

Well, the 9th Circuit recently took a very liberal view in its September 6 decision in Direct Technologies, LLC v. Electronic Arts, Inc. (Hat tip to  and  for identifying the case.)

In that case, although the plaintiff did basically nothing, the court observed that the plaintiff might have satisfied its reasonable measures requirement by relying on its “implicit business expectations that [the defendant] would keep the [information] secret . . . .” Basically, the court’s decision is that the reasonable measures requirement may be satisfied by simply relying on the assumed confidential nature of a relationship.

Am I the only one who immediately thought of this clip?

Federal (Massachusetts):  On September 19, 2016, the District of Massachusetts issued a decision in Kurra v. Synergy Computer Solutions, Inc. sending the case to Michigan, in yet one more case following Atlantic Marine, and enforcing a forum selection clause in a noncompete agreement.

Federal (Missouri):  Unlike the Jimmy John’s sandwich makers, executives at Panera can be (and one recently was) enjoined from joining Papa Johns. Such was the August 3, 2016 decision in Panera, LLC v. Nettles.

Federal (Virginia):  The question of whether ownership of stock can violate a noncompete should not really be an issue, but yet, it does occasionally surface. On August 31, the District of Virginia issued a decision in Hair Club for Men, LLC v. Ehson, that did not apply Virginia’s red pencil doctrine to invalidate an agreement that would have prohibited the holding of stock in a competitor. See Noncompete Restriction Against Owning Stock Not Necessarily Unenforceable.

Federal (ITC):  Trade secrets litigation at the ITC is in vogue these days since Dean Pelletier‘s team’s victory in the TianRui case. That case stands for the proposition (among others) that misappropriation of trade secrets occurring outside of the United States can serve as the basis to justify seizure of products containing the trade secret imported into the United States. Well, a recent case is now challenging that rule, petitioning the United States Supreme Court for certiorari. For more, see Sino Legend v. ITC – Update: Certiorari Petition Seeks to Preclude ITC Actions Based on Foreign Theft of Trade Secrets

Federal (ITC):  The ITC recently issued a decision affirming the award of terminating sanctions for the spoliation of evidence. This is quite significant, as terminating sanctions is the harshest sanction available. See Stainless steel products: commission affirms default finding based on bad-faith spoliation.

Federal (Chamber of Commerce):  In the midst of the ongoing debate over the interplay between protection from employee theft of trade secrets and the overuse of noncompetes, enter the United States Chamber of Commerce and fears of risk of loss of trade secrets (and other intellectual property) by means of insufficient cybersecurity. See more in a nice summary of the issue by Kate M. Growley of Crowell & Moring:  U.S. Chamber of Commerce Calls for Greater Trade Secrets Protection.

California:  California is at it again. On September 25, 2016, California adopted a new law (effective January 1, 2017) making forum selection clauses in noncompetes unenforceable (putting the employer at risk of paying attorneys’ fees for trying). As a practical matter, that issue is not so different from Louisiana’s forum selection law, which precludes enforcement of agreement on forum selection unless the choice is made after a dispute has arisen. How that this prohibition will work in federal courts, given Atlantic Marine, remains to be seen.

California:  On October 18, the California Court of Appeal for the First Appellate Division issued an order in Robinson v. U-Haul Company of California permanently enjoining U-Haul from enforcing against one of its former location operators a noncompete in the parties’ dealer contract.  For a discussion of the case, see California Appeals Court Affirms Permanent Injunction Against Use of Noncompete in California Contracts.

Delaware:  Like the Atlantic Marine cases in the federal courts, state courts routinely honor forum selection clauses. Such was the case recently in the Delaware Chancery Court, which enjoined the employee from prosecuting his case in Massachusetts. See Delaware Chancery Court Blocks Former Exec’s Effort to Invalidate Noncompete in a Massachusetts Court

Illinois:  On June 27, in Airgas USA, LLC v. Adams, the United States District Court for Northern District of Illinois issued yet another decision rejecting the requirement established in Fifield v. Premier Dealer Services, Inc., 993 N.E.2d 938 (Ill. App. Ct. 2013), that absent other consideration, an employee noncompete must be supported by at least two years of employment. As the court explained,

While Fifield, McInnis v. OAG Motorcycle Ventures, Inc., 35 N.E.3d 1076 (Ill. App. 2015), and Prairie Rheumatology Assoc., S.C. v. Francis, 24 N.E.3d 58 (Ill. App. 2014) have applied a bright-line test requiring at least two years of continued employment for the continued employment to be considered adequate consideration, the Illinois Supreme Court holds that the validity of a noncompetition agreement depends “on the totality of the facts and circumstances of the individual case. Factors to be considered in this analysis include, but are not limited to, the near-permanence of customer relationships, the employee’s acquisition of confidential information through his employment, and time and place restrictions. No factor carries any more weight than any other, but rather its importance will depend on the specific facts and circumstances of the individual case.” Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393, 403 (Ill. 2011). A “totality of the facts and circumstances” test conflicts with the “bright-line” rule utilized by the Illinois Appellate Court in the cases noted above. Accordingly, the court rejects the two-year bright-line rule. In doing so, the court joins the other federal courts in this district that have determined that “[i]t is probable, that if confronted with the question of the adequacy of consideration, the [Illinois Supreme Court] would likewise avoid the appellate courts’ bright-line test in favor of a more flexible case-by-case determination, considering the totality of the circumstances.” Allied Waste Servs.of North America v. Tibble, No. 16 C 1660, 2016 WL 1441449, *4 (N.D. Ill. Apr. 7, 2016) (Leinenweber, J.); see also, R.J. O’brien & Assoc., LLC v. Williamson, No. 14 C 2715, 2016 WL 930628 (N.D. Ill. Mar. 3, 2016) (Gettleman, J.); Montel Aetnastak, Inc. v. Miessen, 998 F. Supp.2d 694 (N.D. Ill. 2014) (Castillo, C.J.); but see, Instant Technology, LLC v. DeFazio, 40 F.Supp. 3d 989 (Holderman, J.).

Illinois:  Hat tip to Doug Albritton for identifying the unpublished decision, Mohanty v. St. John Heart Clinic, upholding a physician noncompete (including the enforcement of a fee-shifting provision in the agreement). See Doctor Covenants Upheld, Large Attorney Fee Award Upheld for Small Damages

Illinois:  As noted in August, following on the Jimmy John’s settlement and the White House’s efforts at suggested noncompete reform, Illinois passed a law banning noncompetes for low wager earners. See Illinois Bans Noncompetes for Low Wage Earners.

Illinois:  On September 30, the Illinois Appellate Court for the Fifth Division issued a decision in Reed v. Getco, LLC in which the court prevented the employer from waiving the noncompete, where the employer had agreed to pay the employee $1 million for the restriction.

Massachusetts:  Because so many trade secrets and noncompete cases arise out of the employment relationship (if for no other reason than that there are more employer/employee relationships than any other type of business arrangement), these cases are often coupled with breach of fiduciary claims against the employee. An October 24 decision from the Massachusetts Appeals Court (Beninati v. Borghi) focuses on the availability of Massachusetts’ unfair competition statute (G.L. c. 93A) – which provides for multiple damages and attorneys fees, but is not available against employees – against consultants who advised an employee. See Consultant can face 93A liability for aiding, abetting fiduciary violation (paid service).

Michigan:  On July 14, 2016, the Supreme Court of Michigan issued a decision in Innovation Ventures, LLC v. Liquid Manufacturing, LLC, holding that inter-company noncompetes are governed by a rule of reason under antitrust law. See Michigan Supreme Court Holds That the Federal “Rule of Reason” Applies in Evaluating the Enforceability of Noncompete Agreements Between Businesses.

Nevada:  On July 21, 2016, the Nevada Supreme Court issued a decision in Golden Road Motor Inn, Inc. v. Islam, dispelling the generally-accepted view that Nevada courts reform overly broad noncompete agreements.

New Hampshire:  On August 5, 2016, Senate Bill 417 became effective and now prohibits physician noncompetes in New Hampshire.

North Carolina:  One issue that arises often in states (like North Carolina, see here) is, if continued employment alone is not sufficient consideration to support a noncompete, what is? Well, a recent North Carolina Court of Appeals decision, Employment Staffing Group v. Little, provides some guidance:  $100.  (Hat tip to my former partner, Peter Steinmeyer and his associate, Scarlett L. Freeman, for passing along that decision in a recent post.)

Pennsylvania:  In vogue these days is the enforcement of no-raid agreements. No wonder. A Pennsylvania court recently awarded $4.5 million in punitive damages in B.G. Balmer & Co. Inc. v. Frank Crystal & Co., Inc., for the violation of some no-raid agreements (as well as violations of other restrictions, of course). For more, see 4.5 Million Reasons to Abide by a Non-Solicitation Agreement.

Rhode Island:  Effective July 12, 2016, Rhode Island passed a law (R.I. Gen. Laws § 5-37-33) invalidating physician noncompetes, except (as are commonly permitted) for those agreements arising from the sale of a practice (provided that they are no longer than five years).

Virginia:  A recent letter opinion by a judge of the Fairfax Circuit Court identifies misclassification (as an independent contractor as opposed to as an employee) as a defense to the enforcement of a noncompete. See Virginia Non-Competes – Another One Bites The Dust.

 

Other Noteworthy News…