Following a nationwide trend, Illinois has proposed significant legislation affecting employee restrictive covenants, such as non-compete agreements.  While the proposed law does not dramatically change most aspects of the patchwork of Illinois common law, it adds certainty to long-questioned areas and imposes several threshold hurdles and eligibility factors to the test for assessing enforceable restrictive covenants.

Continue Reading What Employers Need to Know About New Non-Compete Legislation in Illinois

The Department of Justice, Antitrust Division (“DOJ”) continues to investigate hiring practices in a number of industries for potential antitrust violations as part of its effort to scrutinize, and in some instances, criminally prosecute, companies and individuals who enter into agreements with their competitors regarding hiring, wages, and solicitation of employees.
Continue Reading Taboola the Latest Target of DOJ’s Aggressive Antitrust Scrutiny of Hiring Practices

California Labor Code Section 925 prohibits employers from requiring employees who reside and work primarily in California, as a condition of employment, to agree to any provision that would require the employee to litigate outside California any claim arising in California, or that would deprive the employee of the benefit of California law with respect to any claim arising in California.  Under Section 925, any such provision is voidable by the employee and if the employee exercises her right to void the provision, then any such claim shall be adjudicated in California under California law.[1]
Continue Reading California Labor Code Section 925 and How Employers Can Avoid It

On January 11, 2021, the mayor of the District of Columbia, Muriel Bowser, signed the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), which is set to be one of the broadest and most expansive bans on non-competes in the country.  The Act bans provisions in employment agreements that forbid any employee from working for a competitor not only after their employment, but also during their employment.  While the Act does not apply retroactively, any non-compete entered into after the Act’s effective date is void and unenforceable.

The Act was submitted for the requisite 30-day congressional review period and is expected to become law in the coming months.
Continue Reading Employment Agreements: DC’s Recent Ban on Non-Competes is One of the Broadest in the Country

Trade secrets and other proprietary information can be among a business’ most valuable assets and drive its competitive advantage.  It is therefore ordinarily critical that employees be bound by an enforceable agreement that prohibits them from misusing or otherwise harming the value of the employer’s confidential information.  The recent California Court of Appeal decision, Brown v. TGS Management Co., LLC (2020) 57 Cal.App.5th 303, should be of concern to employers because it holds that an employee confidentiality agreement may be voided as a de facto unlawful non-compete agreement if it has the effect of preventing the employee from working in the industry.   
Continue Reading California Court Strikes Down Overbroad Confidentiality Agreement as a de facto Non-Compete

Employment agreements with restrictive covenants typically contain both a forum selection clause, which determines the forum where a dispute must be heard, and a choice of law clause, which determines the law that applies to the dispute. As lawyers who regularly litigate post-employment restrictive covenant cases well know, enforcement or restrictive covenants often turns on which court decides the dispute, and what law applies, which is why these provisions are so important.  Often, however, employers consider these provisions as mere drafting afterthoughts.  They shouldn’t be, given the outsized importance they can play in determining enforcement.  Moreover, at the dispute stage – whether seeking to enforce or resist a restrictive covenant – forum selection and choice of law provisions should inform, and often drive, litigation strategy.
Continue Reading Don’t Neglect Forum Selection and Choice of Law Provisions When Drafting or Litigating Restrictive Covenants

Business-to-business contracts often concern trade secrets. Contracts such as NDAs, joint development agreements, license agreements, vendor agreements, and other commercial agreements commonly contain restrictive covenants relating to the protection of trade secrets or other protectible interests. But when do these terms constitute an illicit restraint of trade under California law? The California Supreme Court just addressed this very question in Ixchel Pharma v. Biogen , holding that most B2B agreements are governed by the common law rule of reason, instead of the flat prohibition on noncompetes applicable to the employment context.
Continue Reading Ixchel v. Biogen: California B2B Noncompetes Do Not Per Se Violate B&P Section 16600, and Are Instead Subject to Rule of Reason

Non-compete, proprietary information, and confidentiality agreements often contain forum selection provisions, which specify where any related litigation must be brought.  But what is to happen when the underlying agreements contain different forum selection provisions?  A United States District Court for the Southern District of Indiana recently addressed this very issue, and held that in such cases, a court must decide for itself which proposed forum has the greater connection to the underlying dispute by focusing on just the facts.  See High Tech Nat’l, LLC v. Wiener, No. 119-CV-02489-SEB-MJD (S.D. Ind. Nov. 26, 2019).
Continue Reading Trade Secrets and Conflicting Forum Selection Provisions – Focus on the Facts!

Social media contact lists have become an increasingly important part of a business’s customer lists.  While courts are still grappling with who legally “owns” the data that the employee acquired on the employer’s dime—such as LinkedIn customer connections or access to a list of Twitter-feed recipients[1]—employers can still take steps to bolster the company’s claim of ownership.
Continue Reading Protecting Social Media Contact Lists as Trade Secrets