Over the past two years, employee mobility seems to be at an all-time high.  In fact, the labor market is so fluid that pundits and experts often refer to it as the “Great Resignation.”  Although employee mobility can be a great opportunity for both employees and prospective employers, employers hiring new employees should always beware of potential problems such as restrictive covenants, which may follow an employee to a new job.
Continue Reading Void vs. Voidable: The Distinction That Can Make or Break a Tortious Interference Claim in Light of the Great Resignation

Trade secret litigation presents a variety of procedural and practical complexities at every stage of the proceeding. One of the most important—yet often overlooked—issues in these cases can be summarized by the following question:
Continue Reading Signed, Sealed, Delivered? Fifth Circuit Finds Sealing of Sensitive Information Requires Far More Than a Protective Order

A recent decision from the Eastern District of California illustrates the sometimes fine line between the need for plaintiffs to allege a claim for trade secret misappropriation in sufficient detail,
Continue Reading Dairy, LLC v. Milk Moovement, Inc.: Identifying Software Trade Secrets With Particularity to State a Claim for Trade Secret Misappropriation

Employers faced with an apparent trade secret misappropriation by former employees must decide what jurisdiction to bring suit in.  For an employer headquartered outside of California who employs California residents  working primarily in California, choice of law and forum selection clauses favoring states other than California may be ineffective against them unless they had counsel who negotiated the provisions on their behalves.  (Cal. Lab. Code § 925.)  A recent California Court of Appeal decision highlighted this point, and found that where a California employee is sued by the employer for trade secret misappropriation in a separate state based on an out-of-state forum selection clause, the employee may separately sue in California to void the provision, despite the ongoing litigation in a sister state (See LGCY Power, LLC v. The Superior Court,  75 Cal. App. 5th 844 (2022).)
Continue Reading California Labor Code Section 925: A Word of Caution for Out-of-State Employers of California Employees

This month, the Ninth Circuit’s decision in DePuy Synthes Sales v. Howmedica Osteonics  held that a U.S. district court in California properly invalidated a foreign choice-of-law and forum selection provision under California Labor Code § 925, and denied a motion to transfer the case to a different venue.  While this might seem at first blush like a technical issue of federalism and contractual interpretation, the decision indicates that federal courts in the Ninth Circuit will also apply California’s partial prohibition on the use of foreign forum-selection and choice-of-law clauses as to employees.
Continue Reading Ninth Circuit Upholds Application of California Labor Code To Contractual Forum-Selection and Choice-of-Law Clause To Keep Dispute Over Non-Compete Clause in California

The Eastern District of New York recently highlighted the importance of maintaining the confidentiality of trade secrets where the underlying trade secrets are readily apparent to anyone interacting with the holder’s product.

Continue Reading Preserving Trade Secrets By Taking Additional Protective Measures In Your Licensing Agreement

On January 24, 2022, the Federal Circuit affirmed the grant of a preliminary injunction blocking the publication of a patent application on the basis that it contained the plaintiff, Masimo Corp.’s trade secrets. Masimo Corp. v. True Wearables, Inc., No. 2021-2146, 2022 WL 205485 (Fed. Cir. Jan. 24, 2022). The Court of Appeals did so despite evidence that a widely circulated and cited paper on statistics had disclosed an equivalent algorithm, because the defendant failed to show that others in Masimo’s particular field (or a related field) were aware of the paper.

Continue Reading Federal Circuit Deems Algorithm Potentially Valid Trade Secret Notwithstanding Prior Publication

In a recent decision from the U.S. District Court for the District of Florida, a healthcare product manufacturer’s claim of trade secret misappropriation against a competitor and a customer was thrown out on summary judgement.  While the plaintiff showed that at least some defendants had access to the plaintiff’s alleged trade secret protected CBD cream formula and manufacturing process, the plaintiff failed to demonstrate that the defendants’ accused CBD cream product was manufactured using the alleged trade secret.  Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC, No. 9:20-cv-81501-Matthewman, 2021 U.S. Dist. LEXIS 206871 (S.D. Fla. Oct. 27, 2021).

Continue Reading Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC – A Cautionary Tale: Meticulous or Careless Strategy Required to Prove Your Trade Secret Claim

In July 2021, President Biden signed an Executive Order directed at promoting competition in the U.S. economy.  As part of that overarching goal, the Biden Administration tasked the Federal Trade Commission (“FTC”) with curtailing the use of non-compete clauses “and other clauses or agreements that may unfairly limit worker mobility.”  While the FTC has only recently initiated informal proceedings on the issue, the agency – and perhaps Congress as well – seems poised to move forward in 2022 to address restrictive covenants.

Continue Reading FTC reviews non-compete agreements: An Update On The Future Of Restrictive Covenants Following The Biden Administration’s Proposed Curtailment and Safeguarding of Proprietary Information

With tightening labor markets and the increasing mobility of healthcare workers, including physicians, now is a good time to revisit non-compete agreements to ensure they are enforceable.  Texas courts will generally enforce non-compete agreements as long as they are ancillary or part of an otherwise enforceable agreement and do not contain restraints greater than necessary to protect the employer’s legitimate interests.  These interests include business good will, trade secrets, or other confidential  and proprietary information.

Continue Reading Healthcare Agreements – Key Issues Impacting the Enforceability of Non-Compete Clauses for Texas Physicians