Restrictive Covenants Non-Compete Agreements

News & Analysis as of

Recent Decisions Highlight Courts’ Reluctance to Modify Overbroad Non-Compete Provisions

In what may be a trend, several courts around the country this year have embraced strict interpretations of non-compete agreements, refusing to blue pencil or equitably reform overbroad or unreasonable clauses in non-compete...more

Alabama’s Restrictive Covenants Statute: New Insight on Retroactivity, Employee Training, and the Blue Pencil Rule

Alabama’s new restrictive covenant statute became effective on January 1, 2016. Recently published committee comments clarified certain provisions of the law. The following briefly summarizes the final committee comments...more

Government Attacks on Non-Compete Agreements Continue

Non-compete agreements have long been used by employers as an effective tool to protect their valuable trade secrets and confidential information. However, employers’ overuse of non-compete agreements and employers’ practice...more

A Rose by Any Other Name is Not as Sweet: When a Non-Solicit is Actually a Non-Compete

The Ontario Court of Appeal has held that the words “accept business”, in what the employer intended to be a non-solicitation clause, served to restrict competition and is therefore not merely a non-solicitation...more

New Illinois Law Restricts Use of Employee Non-Compete Agreements

Governor Bruce Rauner has signed into law the Illinois Freedom to Work Act, prohibiting private sector employers from requiring their “low-wage employees” to sign non-compete agreements. The Act takes effect on January 1,...more

Illinois Limits Non-Compete Agreements Yet Again

On August 19, 2016, Governor Bruce Rauner officially signed into law the Illinois Freedom to Work Act (the “Act”), with an effective date of January 1, 2017. The Act, while short and to the point, will have a significant...more

Court Upholds Enforceability of “Clickwrap” Employee Agreement

As we have previously discussed, if you want your electronic contracts to be enforceable, it is a best practice to require the counterparty to affirmatively accept the contract by checking a box or clicking a button. A recent...more

The New York Attorney General’s Crackdown on Non-Compete Agreements: What It Means for Companies

Background - Recently, the NYAG has turned quite a few heads by entering into a new legal arena: challenging non-compete agreements between companies and their employees. The NYAG settled two investigations brought...more

Illinois Prohibits Non-Compete Agreements with Low-Wage Employees

Effective January 1, 2017, the Illinois Freedom to Work Act (the “Act”) will prohibit private sector employers from entering into non-competition agreements with employees earning a “low wage.” The Act defines low-wage...more

FRANCHISOR 101: Non-Competes for Franchisees’ Employees

A "non-compete" provision limits the franchisee's ability, after the franchise agreement ends, to continue to work in a similar type of business to the franchise within a certain time period and geographic area. The purpose...more

Poachers Beware: Wisconsin Court Rules That Restrictions on Employee Solicitation Are Subject to Law Governing Noncompetes

In a case of first impression, the Wisconsin Court of Appeals held that anti-poaching provisions in post-employment restrictive covenants are subject to the statutory regulations that govern noncompete agreements in...more

RIGHT IN THE BREADBASKET: Lessons From Early Cases at the Intersection of Noncompetes and the DTSA

As many TSW readers are aware, 2016 has been a big year for trade secret law, with both the United States and the European Union expanding trade secrets protections and increasing the uniformity of their laws. But as good as...more

North Carolina Court Again Narrows Scope of Post-Employment Restrictions

Last week’s EmployNews reported a Fourth Circuit Court of Appeals decision applying North Carolina law that invalidated an employment non-competition clause due to what it viewed as the overreaching scope of the restrictions....more

Agreement Prohibiting Solicitation of Employees by Former Employee may be Unenforceable

A recent decision from the Wisconsin Court of Appeals has raised serious questions regarding non-solicitation agreements that are often included as part of an employment agreement or severance agreement. A non-solicitation...more

Restrictive Covenants in Michigan: A Cent, a Peppercorn, or Continued At-Will Employment

A business dispute in Michigan may provide insight into the consideration required to support a noncompete contract restricting future employment. Innovation Ventures, LLC v. Liquid Manufacturing, LLC, No. 150591, Michigan...more

Two New England States Pass Legislation Restricting Physician Non-Competes

We’ve written a lot this summer about the Massachusetts legislature’s latest failed attempt at non-compete reform. Two other states in New England, however, are able to claim accomplishments in that regard. Specifically,...more

NY Attorney General Schneiderman Declares “War” on Non-Compete Agreements That He Perceives as Overbroad

In an initiative that is virtually without precedent in New York, in the past two months (June 15, June 22 and August 4) Attorney General Schneiderman announced agreements with three separate companies in three different...more

Wisconsin Court Finds Anti-Poaching Agreements to be Unenforceable

Analyzing an anti-poaching agreement as a non-compete agreement, a Wisconsin Court of Appeals has confirmed that a former employee’s agreement not to solicit other employees may be void and unenforceable if it is too broad....more

Fourth Circuit Decision Reminds Employers That Overbroad Noncompete Agreements May Not Be Enforceable

If your company operates in a territory covered by the 4th circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina) and requires employees to sign a noncompete agreement with language similar to the...more

Don't Use Form Non-Compete with North Carolina Employees

Most states allow judges to “reform” provisions of employee non-competition agreements deemed overbroad. For example, if the court believes that a 100-mile territorial restriction is too broad, it can reduce the radius to 50...more

State Attorneys General on the Attack Against Noncompete Overuse

Too much of a good thing can be bad – a maxim that some employers have historically ignored by requiring entire workforces, including rank-and-file employees, to submit to post-employment noncompete obligations as a condition...more

A Few Things To Avoid When Drafting A North Carolina Covenant Not To Compete

The Business Court closely examined a set of restrictive covenants last week in Sandhills Home Care,, LLC v. Companion Home Care-Unimed, Inc., 2016 NCBC 59. This decision collects a number of North Carolina Court of Appeals...more

You Cannot Create A Restrictive Covenant Out of Thin Air

I recently read a lengthy, and I have to admit, well-crafted letter by one employer (who I will call Company A) accusing a former executive (Mr. B) of violating every conceivable restriction relating to recruiting employees...more

Massachusetts Non-Compete Reform: Maybe Next Year

Once again, the Massachusetts legislature took on non-compete reform, and once again, came up empty-handed. On July 31, 2016, the legislature adjourned without reaching a compromise to alter the state’s non-compete landscape....more

A Month in UK Employment Law - August 2016

News & Legislation Update - The UK votes to leave the EU - We could not write a roundup of news stories from the UK without referencing the UK's vote to leave the EU. The so-called "Brexit" has created...more

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