Restrictive Covenants

News & Analysis as of

Bring Out the Body Bags: Seller’s Covenant, In Asset Sales Agreement, Not To Compete Within 150 Miles For 10 Years Unenforceable

Palmetto bought the assets of Knight Systems’ mortuary transport business. The agreement of purchase and sale included (a) Palmetto’s commitment to buy body bags, at specified discounted prices, exclusively from Knight...more

How Much Would You Charge To Let Your Counterparty Breach The Contract – Wrotham Park Damages

The Court of Appeal's decision in Karen Morris-Garner & Andrea Morris-Garner v OneStep (Support) Ltd [2016] EWCA Civ 180 suggests that Wrotham Park damages may become more common as a remedy for breach of contract. These...more

Non-Compete Legislation In Massachusetts: Could It Actually Happen?

On May 16, 2016, the Massachusetts General Court’s Joint Committee on Labor & Workforce Development reviewed a re-drafted bill concerning non-compete agreements in the Commonwealth and reported it out of the Committee...more

If Your Business Wants To Reap The Full Benefits Of The New Federal Trade Secret Misappropriation Law, You Need To Update Your...

Employers looking to further protect their ever-valuable trade secrets are welcoming the arrival of the Defend Trade Secrets Act ("DTSA"), a new federal law permitting trade secret owners to file misappropriation claims in...more

The Dearth of Restrictive Covenant Case Law in Georgia

It was five years ago this week (May 11, 2011, to be precise) that Georgia's new restrictive covenant statute went into effect. Prior to the effective date of the statute, Georgia was (surprisingly for many out-of-state...more

UPDATE: Federal Defend Trade Secrets Act Signed Into Law; Employers May Need to Notify Employees

After overwhelming passage in both the House and Senate, President Obama signed the Defend Trade Secrets Act into law on April 11, 2016. The Act provides a truly uniform, nationwide set of standards for protecting trade...more

Georgia’s Restrictive Covenants Act Turns Five Years Old: Assessing the Impact of Georgia’s Law Five Years On

While the federal Defend Trade Secrets Act is garnering a great deal of attention, it’s worthwhile to remember that state law remains critically important in drafting restrictive covenants.  This week, May 11, 2016, marks the...more

What the Defend Trade Secrets Act Means for You

On May 11, President Obama signed the Defend Trade Secrets Act of 2016 (DTSA), which received rare support across party lines, passing Congress unanimously in the Senate and by a vote of 410-2 in the House of Representatives....more

South Carolina Court of Appeals Says 150-Mile Geographic Restriction in Non-Compete is Unreasonable

South Carolina courts evaluate the enforceability of non-compete provisions executed in the employment context and in connection with the sale of the business under the same reasonableness test. To be enforceable in South...more

No Microscope Needed to See Why This Non-Compete Is Unenforceable

When is a microscope not needed? When the problem one is looking at is big as an elephant, not small as an amoeba. Nion, an electron microscope manufacturer, contracted with Gatan, a spectrometer manufacturer, to use...more

Utah's New Post-Employment Restrictions Act Effective Tomorrow

Utah's newly enacted Post-Employment Restrictions Act (Act) takes effect tomorrow and significantly limits the duration of newly entered noncompetition agreements. Employers should review their noncompetition agreements going...more

Legislative Update: New Non-Compete Restrictions for Physicians

Continuing my review of new employment-related bills is a measure that limits the use of non-compete agreements for doctors. Anyone who tracks bills knows that the name on the bill sometimes doesn’t match the content....more

[Webinar] Noncompete Agreements: Choice of Law and Venues Best Practices - May 25th, 1:00p.m. EDT

Courts in different jurisdictions take very different approaches to whether and under what circumstances noncompete agreements will be enforced. In fact, the laws with respect to enforcing these agreements differ by...more

The White House is Interested in Non-Compete Reform

President Obama is expected to sign the Defend Trade Secrets Act, which passed with overwhelming, bipartisan support in the House and Senate in recent weeks (and about which we will have a lot more to say in the coming days)....more

White House Issues A Call To Arms With Respect To Non-Competes

On May 5, 2016, the White House issued a report largely piggybacking on a recent U.S. Treasury Department study, on which we previously posted, with a primary focus on the purported misuse and negative impacts of non-compete...more

Despite Evidence That Ex-Employee Violated Customer Non-Solicitation Covenant, Injunction Denied Because No “Irreparable” Harm

Touzot was an employee of ROM, a seller of products used in making balsa wood model planes and boats. His employment agreement included a post-termination customer non-solicitation covenant. After he left ROM, he became a...more

New Noncompete Restrictions Pass Connecticut General Assembly

Connecticut now has one more legislative restriction on noncompetition agreements to join the prohibitions of noncompetes on security guards and radio and TV personalities (and lawyers, but that is not a legislative...more

Congress Passes Federal Trade Secrets Act

With the long-awaited passage of the Defend Trade Secrets Act of 2016 (“DTSA”), which amends the Economic Espionage Act, and expected imminent signing by President Obama, federal law will now provide a civil cause of action...more

NC Supreme Court Reaffirms Strict Blue Pencil Doctrine for Restrictive Covenants

The North Carolina Supreme Court recently reaffirmed that the power of North Carolina courts to “blue pencil” restrictive covenants is extremely limited, even when an agreement purports to give a court express authority to...more

Utah Passes New Law Placing Restrictions on Noncompetition Agreements

On March 9th, 2016, the Utah Legislature passed a bill, which the governor signed, substantially limiting an employer's ability to use noncompetition covenants to prevent former employees from competing against them. The new...more

Non-Compete Restriction Held To Be Unenforceable

In Bartholomews Agri Food Ltd v Thornton [2016] EWHC 648 (QB), the High Court considered whether a non-compete post-termination restriction was an unlawful restraint of trade. Bartholomews Agri Food Ltd (Bartholomews)...more

Quirky Question #277: Passage of the Defend Trade Secrets Act

Question: I saw something on the news about some new trade secrets legislation. What’s going on with that? Will it help employers better protect their trade secrets?...more

The Defend Trade Secrets Act of 2016 – Key Takeaways

The Senate and House passed the Defend Trade Secrets Act of 2016 (DTSA) on April 11 and April 27, 2016, respectively. President Obama previously indicated that he will sign DTSA into law. Below is a brief synopsis of DTSA's...more

Medical Non-Competes in Rhode Island: No Clean Bill of Health

The Rhode Island Superior Court recently refused to enforce a non-compete agreement against a local physician because it was against the public interest. Medicine and Long Term Care Associates, LLC v. Khurshid, PC 2015-0458,...more

Rhode Island Trial Court Decision Could Spell Trouble for Employers Seeking to Enforce Restrictive Covenants Against Healthcare...

One of an employer’s first steps in a suit against a former employee to enforce a restrictive covenant is to seek a preliminary injunction to prevent the employee from continuing to violate his or her contractual obligations....more

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