News & Analysis as of

Breach of Contract Non-Solicitation Agreements

Seward & Kissel LLP

Employment Litigation Roundup: April 2024

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Employer sues former traders for using an allegedly confidential trading strategy but loses bid for emergency injunctive relief. On April 12, Jane Street Group LLC (“Jane Street”) sued two of its former traders and...more

McDermott Will & Emery

Fifth Circuit Rejects Recruiter’s Trade Secret Misappropriation and Contract Defenses

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The US Court of Appeals for the Fifth Circuit affirmed a district court’s decision finding trade secret misappropriation and breach of contract based on a recruiter’s improper use of confidential client information. Counsel...more

Lewitt Hackman

Franchisor 101: Getting Away With Tax (Franchisor) Evasion

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A Pennsylvania federal court refused to enforce non-competition and non-solicitation covenants in a franchise agreement of a nationwide tax preparation service franchisor. The court dismissed the franchisor’s request for...more

Seward & Kissel LLP

Employment Litigation Roundup: November 2023

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Ex-employee’s golf outing with customer does not violate non-solicit - An auto parts manufacturer in Michigan sought a preliminary injunction against a former sales employee for violating his restrictive covenants,...more

Holland & Knight LLP

A Cautionary Tale from arrivia Inc. v. Rowley

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Enforceability of releases for unknown claims at the time of settlement is a well-established legal principle, as highlighted in the recent case, arrivia Inc. v. Rowley, No. CV-23-01039-PHX-DLR, 2023 WL 7386384 (D. Ariz. Nov....more

Lathrop GPM

Pennsylvania Federal Court Rules It Has Subject Matter Jurisdiction to Decide Trade Secret Claim but Dismisses as Untimely...

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A federal court in Pennsylvania granted in part and denied in part a former franchisee’s motion to dismiss a franchisor’s allegation that she misappropriated trade secrets and breached the franchise agreement. JTH Tax, LLC v....more

AEON Law

Patent Poetry: Employee Confidentiality Agreements Can Be Enforced without New Consideration

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A federal court in Pennsylvania has held that a confidentiality agreement signed five months after an employee was hired can be enforced after the employee leaves even if the employee received no consideration other than...more

McDermott Will & Emery

Stryking Noncompete Preliminary Injunction

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The US Court of Appeals for the Sixth Circuit upheld a district court’s grant of a preliminary injunction restricting a former employee from working for conflicting organizations or communicating with a competitor’s counsel....more

Foley & Lardner LLP

Protecting Trade Secrets In States That Disfavor Noncompetes

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Federal and state laws are becoming increasingly unfriendly to employers' efforts to impose post-employment restrictions on workers via nonsolicit and noncompete agreements. However, even in states that have historically...more

AEON Law

Patent Poetry: Court Awards $500K in Attorneys’ Fees to Allstate in Trade Secret Case

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A New Jersey federal court has ruled in favor of Allstate Insurance in a dispute over attorney’s fees in a case involving allegations of employee misuse of company confidential information and trade secrets. Defendants...more

Lewitt Hackman

Franchisor 101: No Repairing Delayed Filing

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A New Jersey federal court denied a franchisor’s motion for preliminary injunction against a franchisee due to franchisor’s 11 month delay in bringing the motion. Franchisee entered into two franchise agreements with H-1 Auto...more

Proskauer - California Employment Law

California Court of Appeal Publishes Opinion Upholding Customer Non-Solicitation Covenant

Despite California’s general hostility towards post-termination restrictive covenants, the California Court of Appeal, in a recently published opinion, Blue Mountain Enters., LLC v. Owen, 74 Cal.App.5th 537 (1st Dist. Jan....more

Morris James LLP

Chancery Rules That The Standard Of Proof For Contempt Motions Is The Preponderance Of The Evidence, Not Clear And Convincing...

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inTEAM Associates, LLC v. Heartland Payment Systems, LLC, C.A. No. 11523-VCF (Del. Ch. Oct. 29, 2021) - Court of Chancery Rule 70(b) empowers the Court to hold a party in contempt for, among other things, failing to obey...more

Lewitt Hackman

Franchisor 101: Competing With a Non-Compete Covenant?

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A federal court in Louisiana granted a preliminary injunction against a former franchisee of Liberty Tax Service for breaching post-termination covenants under a franchise agreement. Liberty Tax entered into franchise...more

Winstead PC

Keeping Eyes Wide Open When New Members Join the Pack: A Cautious Approach to the Addition of New Business Partners

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There are many reasons for business owners to consider adding new partners, including to secure additional capital, to add needed expertise to help grow the company, to bring family members or close friends to join in...more

Farrell Fritz, P.C.

Restrictive Covenants: The Importance of Understanding Their Contractual Limits

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If supermodel Tyra Banks has taught us anything about the modeling industry, it’s that the competition is fierce. Unfortunately, one Manhattan-based modeling agency and former agent aren’t learning this lesson on the...more

Bass, Berry & Sims PLC

Chris Lazarini Provides Insight on the Four Factors to Consider when Temporary Injunctive Relief is Requested

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Bass, Berry & Sims attorney Chris Lazarini provided insight on a case involving a plaintiff’s request for a temporary restraining order (TRO) against former employees who allegedly stole confidential client contact...more

Ward and Smith, P.A.

Reminder to North Carolina Employers: Take Time to Thoughtfully Craft Your Restrictive Covenants!

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A recent decision of the North Carolina Court of Appeals serves as an important reminder to avoid the temptation to overreach when seeking to protect your customer relationships. Restrictive covenants prohibiting...more

Morris James LLP

Chancery Finds Prospective Purchaser May Pursue Breach Claims Against Target Despite Termination Fee Payment

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Genuine Parts Company v. Essendant Inc., C.A. No. 2018-0730-JRS (Del. Ch. Sept. 9, 2019). Termination fee provisions are commonplace buy-side protection in M&A transactions intended to recoup a failed prospective...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Merger Agreement Breach Claims Even Though Defendant Paid The Contractual...

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On September 9, 2019, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery denied Essendant Inc.’s motion to dismiss an action for breach of a merger agreement brought by Genuine Parts Company...more

Dorsey & Whitney LLP

Colorado Courts Further Restrict Use of Restrictive Covenants

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Refusing to enforce a non-solicitation provision that violated public policy, the Colorado Court of Appeals held that parties to a non-solicitation agreement cannot contractually obligate the court to “blue pencil” the...more

McAfee & Taft

Ruling offers guidance for companies seeking injunctions to protect trade secrets

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Customers, trade secrets, and proprietary information are the lifeblood of any company. For this reason, companies routinely have employees sign confidentiality agreements and, to the extent they are enforceable,...more

Fisher Phillips

Contractual Employee Non-solicitation Provisions Under Attack: Employer Loses Battle in Case Involving Unique Facts

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California’s prohibition against contracts that restrain a person’s ability to engage in a lawful business, profession, or trade is well-established and well-known. Ten years ago, in Edwards v. Arthur Andersen LLP (2008) 44...more

FordHarrison

Non-Compete News: Is a Non-Solicitation of Employees Provision Enforceable in California?

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Last month, California’s Fourth District Court of Appeal issued AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th 923 (Cal. Ct. App. 2018), a decision calling into question the validity of non-solicitation...more

Seyfarth Shaw LLP

California Appellate Panel Affirms Injunction Blocking Use Of Employee Non-Solicitation Provision In Dispute Between Travel Nurse...

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On November 1, 2018, the California Court of Appeal, Fourth Appellate District affirmed a trial court’s ruling in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. et al., Case No. D071924, Cal. App (2018) which (1)...more

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