Trade Secrets & Employee Mobility

The Illinois Supreme Court will soon hear oral argument in a case that could resolve the current confusion with regard to non-compete law among Illinois' appellate districts.

A recent opinion from the United States Court of Appeals for the First Circuit highlights the danger in not including a tolling provision in a restrictive covenant agreement.

Contrary to popular perception, California law does not bar all restrictive covenants in the employment context. Rather, in certain very narrow circumstances (i.e., non-competes arising in connection with the sale or dissolution of certain businesses), non-competes are permissible under California law.

In a recent decision in the matter Alliance Bernstein, L.P. v. William Clements, the Supreme Court of the State of New York, New York County (Justice Louis B. York), enjoined a former employee of AllianceBernstein, L.P. ("AllianceBernstein") from working for a competitor for 60 days, pursuant to a provision in an agreement requiring the individual to provide 60 days notice of his intention to resign. Although the original 60 days extending from the date of his resignation had already elapsed, the Court in effect granted a new 60 day period of non-competition, because the individual had started working for the competitor immediately upon his resignation from AllianceBernstein.

Vienna Beef, the official hot dog of the Chicago Cubs, recently struck out in its effort to obtain a temporary restraining order against hot dog rival Red Hot Chicago, Inc. and the grandson of one of the founders of Vienna Beef, Scott D. Ladany.

Peter A. Steinmeyer of Epstein Becker & Green, P.C. will be speaking in an upcoming live webinar entitled "Noncompete Agreements: Latest Litigation Developments" scheduled for Thursday, August 11, 1:00pm-2:30pm EDT.

Peter Steinmeyer and I are pleased to announce that our guide, "Non-Compete Laws: Illinois," written with Christie Tate, is now available in PDF format. This guide is part of a series of guides written and published by our firm, EpsteinBeckerGreen, and the Practical Law Company.

Last week, in the case of Lucht's Concrete Pumping, Inc. v. Homer, the Colorado Supreme Court held that the continued employment of an at-will employee is adequate consideration for a noncompetition agreement. The Court explained that if this was not the case, employers would have an incentive to terminate at-will employees and condition their re-hire on the execution of a noncompetition agreement.

Will treating an individual as an employee rather than an independent contractor - when the parties have agreed to an independent contractor arrangement - preclude enforcement of a non-compete agreement? The Third Circuit Court of Appeals recently answered this question affirmatively, affirming a District Court Order denying an employer's application for a preliminary injunction.

For noncompete and trade secret lawyers in the healthcare industry, the recent Michigan Court of Appeals case of Isidore Steiner, DPM v. Bonanni highlights the importance of understanding applicable state privacy laws as well as the federal Health Insurance Portability and Accountability Act (HIPAA).