News & Analysis as of

Non-Compete Agreements

Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a... more +
Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a certain industry or locale. The purpose of these agreements is to protect employers or business purchasers from competition stemming from former employees or former owners of a business. less -

New Jersey Legislature Wants to Limit Restrictive Covenants

In keeping with the national trend limiting the use of restrictive covenants, in November 2017, the New Jersey Senate introduced SB3518, a bill setting forth sweeping restrictions that would limit the enforceability of...more

Covenant Not to Compete/Landfill Gas Services: Federal Court Addresses Request for Preliminary Injunction

Like many service industries, conflicts sometimes arise between competitors in the environmental service industry segments. A federal district court, Western District, North Carolina (“Court”) addressed in a September 29th...more

Tennessee Court of Appeals Finds that Former Employee Breached Non-Compete Agreement Through Actions of His Subordinates

by Butler Snow LLP on

In November 2017, the Tennessee Court of Appeals upheld a Nashville trial court’s determination that a former employee violated his noncompete agreement by managing employees who solicited competing business in the restricted...more

New Jersey Proposes to Drastically Restrict the Use of Non-Compete Agreements

Last month, the New Jersey State Senate introduced Senate Bill 3518 (the “Bill”), which, if passed, will severely restrict the use and enforceability of employee non-compete agreements in the state of New Jersey. Most...more

New Jersey Bill Would Limit Non-Compete Agreements

by Jackson Lewis P.C. on

A bill in the New Jersey Senate, Senate Bill 3518 (“SB 3518”), and an identical companion bill in the New Jersey Assembly (Assembly Bill 5261), would significantly curtail the use of non-compete agreements in New Jersey. In...more

FRANCHISEE 101: All in the Family

by Lewitt Hackman on

Some creativity can help in passing a former franchised business to the next generation, particularly if the franchisor has no part in the franchisee's succession plan. A federal court in Nebraska preliminarily enjoined...more

WPI State of the States: Lawmakers Trade Jostling Bills for Jingle Bells

by Littler on

With the holidays in full swing, state legislators across the country are enjoying a bit of a lull. December traditionally marks the calm before the storm, as most legislatures are out of session and will reconvene in...more

Massachusetts Once Again Is Considering Enacting Comprehensive Noncompete Legislation

For nearly a decade, Massachusetts legislators have considered various bills aimed at regulating the use of noncompetition agreements in the commonwealth. Noncompetes currently are governed by Massachusetts case law which,...more

FRANCHISOR 101: Injunction Bottleneck

by Lewitt Hackman on

A restaurant franchisor, World of Beer Franchising ("WOB"), recently lost an appeal to enforce a post-termination restriction against a franchisee launching a competing business. Both the trial and appellate court ruled...more

Is A Non-Compete Agreement In Connection With The Purchase And Sale Of A Family-Owned Business Enforceable?

by Murtha Cullina on

In connection with the purchase of a family-owned business, the buyer may seek a non-compete agreement from the selling owners and certain family member employees. Such agreements are intended to protect the buyer from a...more

Non-Compete and Trade Secret Law in Utah: What’s Changed, What Hasn’t Changed and How to Prepare for What’s Ahead

by Payne & Fears on

The general rule in the United States has historically permitted non-competition agreements when they are reasonable in time and geographic scope. California has been the leading exception. Business and Professions Code...more

Drafting Matters: Do Your Non-Competes Bind The Correct Parties?

by Fox Rothschild LLP on

A federal court in Colorado recently upheld a franchisor’s non-competition provision despite that state’s strong public policy against non-competes. The franchisor prevailed due to its thoughtful contract drafting and ability...more

Minnesota Court Of Appeals Reaffirms That A Non-Compete Must Be Part Of A Job Offer To A Prospective Employee

by Jackson Lewis P.C. on

Last month, this Blog highlighted a Minnesota decision evaluating the consideration required for non-compete agreements entered into after the commencement of employment. As that decision held, such agreements must be...more

New Jersey Bill Seeks to Significantly Restrict the Use and Enforceability of Non-Compete Agreements

On November 9, 2017, the New Jersey Senate introduced Senate Bill 3518, which would drastically limit an employer’s ability to enter into, and subsequently enforce, restrictive covenants (or “non-compete” agreements) with...more

Be Careful When Using Liquidated Damages with Your Non-Compete Clause

by Burns & Levinson LLP on

As I have counseled many clients, a non-compete provision is different than most other contractual terms, because simply having mutual consent and consideration will not automatically render it enforceable for reasons of...more

District Court Case Highlights Advantages of ERISA Severance Plans

by Hogan Lovells on

Specialists have long touted certain significant advantages to employers that come along with maintaining ERISA severance plans, and a recent district court case highlights some of these advantages....more

Non-Compete News: Georgia Court of Appeals Confirms Lack of Geographic or Material Contact Limitation Does Not Invalidate...

by FordHarrison on

Georgia’s recent Restrictive Covenant Act, enacted in 2011, does not directly address non-solicitation of employees a/k/a non-recruitment covenants, thereby leaving such provisions subject to the principles developed by...more

Non-Competition Clauses Under Taiwan Law

by K&L Gates LLP on

It is a common practice for employers to impose non-competition obligations on employees both during and after termination of employment. The long standing issue is whether these obligations violate the right to work under...more

Clear As Mud: Illinois Courts Continue To Grapple With The “Adequacy” Of Consideration For Non-Compete Agreements

by Jackson Lewis P.C. on

It is axiomatic that a contract requires consideration to be binding. Ordinarily, courts only inquire into the existence, but not the “adequacy,” of consideration. Illinois courts, however, also scrutinize the adequacy of...more

Non-Compete Legislation Update: Why Choices of Law and Forum are a Big Deal

On October 31, 2017, the Joint Committee on Workforce and Development once again held a hearing to discuss the possibility of legislative changes to Massachusetts non-competition and trade secrets laws. There were several...more

Massachusetts Lawmakers Hear Testimony on Non-Compete Legislation

The Joint Committee on Labor and Workforce Development held a hearing on Tuesday, October 31 to receive testimony on the several bills introduced this session addressing the use of non-compete agreements in Massachusetts....more

Morgan Stanley Abandons Broker Industry Recruiting Pact

by Genova Burns LLC on

In a major blow to the Protocol for Broker Recruiting, which limited restrictive covenants in the broker industry and resulting litigation, according to Reuters (October 30, 2017), Morgan Stanley has decided to withdraw from...more

The State AG Report Weekly Update

by Cozen O'Connor on

AG Elections- Democrat Renato Mariotti Declares Bid for Illinois Attorney General- Democrat Renato Mariotti, a cable news commentator and a former Assistant U.S. Attorney in the U.S. Attorney’s Office in Chicago,...more

Is Customer Information A Trade Secret? Not So Fast!

by Farrell Fritz, P.C. on

Under what circumstances do customer information and business operations constitute “trade secrets” that may be enjoined from use by a former employee ? A recent decision by Justice Elizabeth H. Emerson on this issue serves...more

[Webinar] Best Practices for Employers When Dealing With Issues Relating to Employment Agreements with Restrictive...

by Conn Maciel Carey LLP on

Many companies frequently use non-compete and non-solicit clauses in their employment agreements. However, there are several important legal issues to consider before drafting and executing these agreements. When an employee...more

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