Restrictive Covenants

News & Analysis as of

Corporate and Financial Weekly Digest - Volume IX, Issue 34

In this issue: - Oregon State Court Refuses to Enforce Forum Selection Bylaw - SEC Announces Pilot Program to Widen Tick Sizes for Smaller Companies - NFA Issues Notice Setting Effective Date for Risk...more

Choice of Law Has Huge Consequences, Especially in NC Non-Compete Case

An interesting case out of the Eastern District of North Carolina reminds us of the importance of choice of law when dealing with non-compete litigation. Let’s take a look...more

Muzzling Whistleblowers: When Confidentiality Agreements Go Too Far

Confidentiality agreements can be useful to a company. For example, they can ensure that employees are aware of their company’s valuable trade secrets and can establish requirements to safeguard those assets. But when do...more

Court Was Wrong to Re-Write Covenants

In Prophet v Huggett [2014] ECWA Civ 1013, the Court of Appeal has overturned a recent decision of the High Court in which it had re-written a non-compete covenant to give it commercial effect. You may recall that we...more

Update on Covenants Not to Compete

Covenants not to compete can be valuable for an employer. But, as in many areas of employment law, non-compete law is always changing. Below are some issues for employers to consider, as well as some recent court...more

North Carolina Court of Appeals Rewrites Geographic Territory of Non-Compete in Business Purchase Agreement

When it comes to non-compete agreements, North Carolina is a “blue pencil” state. This is a legal term meaning that when faced with an agreement that is overbroad or unreasonable when applied to the particular circumstances...more

Does Bird’s Eye View Render Executive Non-Compete Unenforceable?

So here’s a good one for healthcare employers to ponder. Let’s say you have an executive subject to a valid and seemingly enforceable non-compete agreement. Because the agreement concerns an executive, we would normally...more

Massachusetts Legislature Fails to Pass Bill to Ban Noncompetes and Adopt the UTSA

Employers in the Commonwealth of Massachusetts can breathe a sigh of relief now that the Massachusetts legislature has rejected a bill to ban noncompetition agreements. The effort to outlaw noncompetes in the Commonwealth has...more

Top Ten Tips for the Workplace

Every now and then, it’s worth it for even the most seasoned HR professional to receive a reminder about best practices in the workplace. Ensuring compliance with our Top Ten Tips list below, will help to keep your workplace...more

North Carolina Court Of Appeals Prods Supreme Court To Update Analysis On Non-Competes

The executive and legislative branches in North Carolina have made efforts recently to encourage the relocation and expansion of businesses in the State in a continuing quest to make North Carolina more business friendly. ...more

Could Non-Compete Agreements Be Banned in Connecticut?

Many employers believe that non-compete agreements, also known as restrictive covenants, can be an important tool in protecting confidential information, trade secrets, and other legitimate business interests. They allow...more

Can the Judge Rewrite Your Non-Compete?

North Carolina has long followed the “strict blue-pencil doctrine,” meaning that the court has two options when faced with an overly broad non-competition agreement: - Strike the unreasonable portion of the non-compete if...more

Purdue Pharm. Products, L.P. v. Actavis Elizabeth, LLC (D.N.J.)

Plaintiffs hold an NDA covering tablets containing two strengths of zolpidem tartrate, which is used in the treatment of middle-of-the-night insomnia. In July 2013, TWi Pharms., Inc. (“TWi”) submitted an ANDA containing a...more

Protecting Your Start-Up’s Assets: The Non-Disclosure Agreement

For many start-ups, their greatest asset is a game-changing idea. To build the idea into a successful business, they will invariably need to share it with potential business partners, consultants, suppliers, employees, and...more

Non-Compete Provisions in ERISA Plans – A Recent 5th Circuit Case

A recent case out of the Northern District of Texas and the Fifth Circuit Court of Appeals touches upon the intersection of non-compete agreements and ERISA plans....more

Quirky Question #237, Badger your employees to sign new non-competes?

Question: We are a Wisconsin employer that has recently lost a number of employees to competing companies in our area. We’re worried our competitors are getting an unfair edge in the market, basically using employees...more

PLEADING A NON-COMPETE CLAIM: Sometimes the Bare Minimum Is Just Enough

There is no such thing as “per se” unenforceability of non-compete agreements (with a few notable exceptions). Instead, a court will enforce a non-compete if it meets whatever criteria a particular jurisdiction establishes –...more

Implied Restrictive Covenant Prevents Conversion of Golf Course to Residential Lots

A federal court of appeals held that a golf course was encumbered by an implied restrictive covenant, preventing the foreclosing lender from selling the golf course for residential development. The U.S. Court of Appeals for...more

Alternative Theories To Address Former Employee Competition Where There Are No Covenants

A recent Connecticut Superior Court case demonstrates that all is not lost for an employer when a former employee without a non-compete or a non-solicitation covenant leaves and competes. Wentworth, DeAngelis & Kaufman, Inc....more

Interfere at Your Own Risk: Legal Fees Awarded as Damages for Violating A Non-Compete Agreement

We all know the default American Rule for attorneys’ fees: unless you get fees in a contract or from a statute, you shouldn’t count on someone else paying the freight if you win your case. But a recent non-compete case brings...more

Do You Know What Your Restrictive Covenant Restricts?

When preparing employment agreements, businesses often want to include provisions that restrict employees in their use of company information, contact with customers, or choice of next employer. These restrictions, called...more

PilieroMazza Legal Advisor - Third Quarter 2014

In this issue: - Avoiding Pitfalls with Restrictive Covenants in Employment Contracts - What Is Enough Consideration of Small Business Interests? – GAO Denies Protests Against GSA Consolidation of Small...more

Back to the Basics: Non-Compete Lost to a Superseding-Agreement Clause

With so much focus on the reasonableness of restrictive covenants, it’s easy to forget that non-competes are plain old contracts—nothing more. And when it comes to enforcing non-competes, basic contract law still applies....more

The World Cup of Non-Competes

Can you imagine if FIFA allowed or enforced non-compete agreements that limited the ability of a player to hold dual citizenship and play for either country? Would the World Cup have suffered if brothers representing Ghana...more

Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH, C.A. No. 5589-VCP (Del. Ch. June 25, 2014) (Parsons, V.C.)

In this post-trial memorandum opinion, the Delaware Court of Chancery dismissed plaintiffs’ breach of contract claim with prejudice, finding that plaintiffs failed to establish they were parties to the License Agreement at...more

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