Restrictive Covenants Non-Compete Agreements

News & Analysis as of

Pennsylvania’s Highest Court Rules Continuing Employment Insufficient Consideration for Non-Compete

Do you have workers in Pennsylvania? If so, do you ask them to sign non-competes after they have already been employed with your company for some appreciable time? If you do, you may be obligated to provide them with...more

Pennsylvania Supreme Court Rules That Continued Employment Is Not Sufficient Consideration for Non-Competes Entered Into After the...

In a landmark ruling of first impression, the Pennsylvania Supreme Court recently held that an employer’s non-competition covenant, which included the employee’s pledge not to challenge the covenant for inadequate...more

Pennsylvania Supreme Court Finds That UWOA Language Does Not Waive Right to Challenge Adequacy of Consideration for Restrictive...

On November 18, 2015, in a highly anticipated decision, the Pennsylvania Supreme Court held that employers could not use the language set forth in Pennsylvania’s Uniform Written Obligations Act (“UWOA”) to avoid providing...more

PA Supreme Court Addresses Consideration Required To Enforce Restrictive Covenants

In a highly anticipated decision, the Pennsylvania Supreme Court ruled earlier this week that “new and valuable” consideration must be conveyed to an employee entering into an agreement containing a restrictive covenant after...more

Pennsylvania Supreme Court Rules that Words Alone Not Sufficient to Support Non-Compete Covenant

Earlier this week, the Pennsylvania Supreme Court rejected a challenge to the longstanding requirement that post-employment restrictive covenants must be supported by actual consideration to be enforceable under Pennsylvania...more

Non-Competes Must Be Supported By Consideration in Pennsylvania: No Exception Based On Employee’s Agreement To Be Legally Bound

The Pennsylvania Supreme Court has ruled that a non-compete entered after the onset of employment without additional consideration is not enforceable even if the employee expressly agreed “to be legally bound.” See Socko v...more

Pennsylvania Supreme Court Finally Kills Hope That Magic Words Can Substitute for Valuable Consideration in Exchange for...

To most practitioners, Pennsylvania law governing the consideration required for an employment agreement containing a restrictive covenant (e.g., a non-competition clause or non-solicitation clause) has been simple: (1) if...more

Trend In The Courts: It’s Getting Harder To Obtain Preliminary Injunctions In Restrictive Covenant Cases

In recent weeks, courts almost routinely have been denying preliminary injunctive relief in cases alleging violation of non-compete and similar employment agreements. Three examples: Burleigh v. Center Point Contractors,...more

Safeguarding Trade Secrets: What You Need To Know

Chances are your business is built on carefully cultivated client lists and finely honed business-development strategies. You might believe that such information is a trade secret and assume that it’s automatically protected...more

Perspectives From the Bench: A Recap of the AIPLA Trade Secret Law Summit’s Judicial Panel

Several members of Seyfarth’s Trade Secrets, Computer Fraud & Non-Competes Practice Group attended the AIPLA’s annual Trade Secret Law Summit on November 12-13, 2015. Rick Lutkus spoke on a panel that was moderated by Erik...more

Illinois Court Leaves Former Employer Without Remedy After Invalidating Its Overly Broad Restrictive Covenants

Just days before Halloween, the Illinois Appellate Court sent a scary message to employers: We will not enforce or judicially modify your overly broad restrictive covenants! In AssuredPartners, Inc. v. Schmitt, No. 13 CH...more

Religious Institutions: October 2015

Timely Topics - A non-compete clause, covenant not to compete or restrictive covenant is a contract provision under which one party agrees not to enter into or start a similar profession, trade or business in competition...more

NC Court of Appeals Finds $100 Adequate Consideration to Support Non-Compete

In North Carolina, an initial offer of employment serves as adequate legal consideration to support non-competition and non-solicitation restrictive covenants. However, once a person is already employed, the employer must pay...more

Essential Protection: Restrictive Covenants of Your Employees

No one knows your company better than your employees. And while great employees can be your most valuable asset, disloyal employees can use their insider information to harm or compete against you. You need protection, and an...more

New Development In The Enforceability of Non-Compete Agreements

As many of our readers may recall, the Illinois Appellate Court in the First District dramatically changed (in our view) the law two years ago in its infamous Fifield decision, by holding that if employment (or continuing...more

Eight-Figure Judgments in Trade Secret Cases – Do We Have Your Attention Now?

The conventional wisdom among attorneys and litigants in the noncompete and trade secret arena is that the cases are all about the injunctions, usually at the TRO and interlocutory injunction stage. Some judgments handed...more

Leveraging employment restraints to protect business assets

When a key employee subject to an employment restraint leaves a business to join a competitor, fast decisions need to be made to protect client goodwill or guard against misuse of confidential information....more

Eleventh Circuit Decision Weakens Injunctive Enforcement of Restrictive Covenants

Last month, in Transunion Risk and Alt. Data Sols., Inc., v. MacLachlan, the Eleventh Circuit held that the district court should have considered hardship to an employee when it enforced a restrictive covenant in an...more

New York Court of Appeals Advises Employers to Take Time to Present Restrictive Covenants to New Employees

It is not uncommon for employers to present restrictive covenants, such as non-competition, non-solicitation, or confidentiality agreements, to new employees in a stack of orientation paperwork. A recent case from New York’s...more

Striking a Balance: Alabama’s Newly-Amended Restrictive Covenant Statute

When Alabama Governor Robert Bentley signed House Bill 352 into law on June 11, 2015, he repealed Alabama’s bare bones restrictive covenant statute and replaced it with a detailed codification of much of Alabama’s restrictive...more

[Webinar] State Specific Non-Compete Oddities Employers Should Be Aware Of - August 18, 1:00pm Eastern

In Seyfarth's sixth installment of our 2015 Trade Secrets Webinar Series, Seyfarth attorneys will discuss the significant statutory changes to several jurisdictions’ laws regarding trade secrets and restrictive covenants and...more

Filer Beware! E-Filing Error Can Destroy Trade Secret Status

First rule of thumb in trade secrets litigation? A trade secret must be kept secret. It is painfully obvious, but modern practitioners must not grow complacent due to the convenience of electronic filing. Although trade...more

Can a Move to California Invalidate a Non-Compete?

It turns out the answer to this question depends on the reason for the move and whether California law applies to the contract. We all know that California is finicky when it comes to non-competes – so much so that...more

Post-Employment Covenants: Is an Inducement to Smile An Inducement to Cancel?

A recent Circuit Court case confirms that the term “non-inducement” means just that. In American Family Mutual Insurance Company v. Graham, the Eighth Circuit affirmed a jury verdict against an insurance agent who, the jury...more

Cracks in the Fifield Armor?: New Dissent Marks First Big Challenge to Illinois' Bright-Line Restrictive Covenant Rule

When continued employment is the sole consideration for a post-employment restrictive covenant (such as a noncompetition agreement), the Illinois Supreme Court requires that an employee be continually employed for a...more

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