On Wednesday, March 6, 2024, I will be speaking at the State Bar of Georgia ICLE – Restrictive Covenants and Trade Secrets CLE on a panel entitled “The Assault on Noncompetes: Update on FTC, NLRB and State Efforts to Ban or Curtail the Use of Noncompetes.” I am going to be presenting with Rachel P.

On Tuesday, January 30, 2024, I will be giving a one-hour Webinar/CLE for the Ohio State Bar Association (OSBA) entitled “Trade Secret and Restrictive Covenant Law Year in Review.”

As readers of this blog know, the number of trade secret and restrictive cases continues to grow each year. As a result, trade secret disputes and

The FTC’s proposed ban on noncompete agreements (and other “de facto” noncompetes such as overly broad nondisclosure agreements) relies in large part on the research done by University of Maryland’s Robert H. Smith School of Business Professor Evan Starr — one of the leading scholars in the field.

Join Ben, Russell and

On Wednesday, December 21, I will be giving a one-hour Webinar/CLE for the Ohio State Bar Association (OSBA) entitled “Trade Secret and Restrictive Covenant Law Year in Review.” 

As readers of this blog know, the number of trade secret and restrictive cases continues to grow each year. At the same time, federal and state legislators,

“It’s all in your head but I own it anyway.” It’s a tough argument to make, let alone swallow, and, fortunately, it has been recently rejected by two federal courts in cases that follow an increasingly common fact pattern:  an employee abides by their restrictive covenant but goes on to compete against their former employer after the covenant expires.  Fearing the competition, the employer pursues a trade secrets claim, arguing that the employee will inevitably disclose its trade secrets or that the employee has memorized and is therefore misappropriating the trade secrets.  Or it involves a similarly-attenuated fact pattern:  the employer has no restrictive covenant at all and there is no evidence of tangible misappropriation (i.e., no evidence of thumbdrives or downloading, no Dropbox or GoogleDoc dumps, nor emailed documents to personal email accounts), but it relies on a trade secret claim that an employee must still be using those trade secrets because they are successfully competing.

The two decisions, CAE Integrated, Inc. v. Moov Technologies, Inc., issued by the U.S. Court of Appeals for the Fifth Circuit, and First Interstate BancSystem, Inc. v. Hubert, issued by the U.S. District Court for the District of Wyoming, both reach the same conclusion:  an employer has a very high burden to overcome when making a trade secret claim on these facts in the absence of compelling evidence of misappropriation.  As I explain below, taken together, these are significant decisions that demonstrate that employers should think carefully before pursuing employees on claims that the former employees were or would be relying on their memories to improperly use trade secrets rooted in customer identity or customer preferences.
Continue Reading Working through the Thicket of Memory, Misappropriation and the Inevitable Disclosure Doctrine: Two Recent Cases Demonstrate Judicial Skepticism

Earlier this month, I wrote a post about President Biden’s executive order directing the Federal Trade Commission (FTC) to take action to curtail the abuse of non-competes and other employment agreements that could limit employee mobility.  In response to that executive order, nearly sixty lawyers (including yours truly) joined in a letter asking the FTC

A lot has been written about the havoc that COVID-19 has wrought on courts and the changes it has caused in the way we litigate and try cases.  Unlike more conventional litigation, which ultimately seeks damages in trials that go before a jury, trade secret litigation frequently revolves around a trade secret owner’s request for an injunction, fast-moving legal proceedings that are generally decided by judges rather than juries.  So what has been the impact of COVID-19 on trade secret cases?  Perhaps the easiest way to analyze the pandemic’s impact is to break it down into three components:  (1) administrative, (2) procedural and (3) substantive.
Continue Reading How COVID-19 Is Changing the Way We Litigate Trade Secret Cases

The economic carnage unleashed by the COVID-19 virus has disrupted virtually every industry in the United States.  At last count, more than 38 million workers had lost their jobs and made claims for unemployment benefits.  And while states have begun easing restrictions on the ability of many businesses to reopen, it is reasonable to expect there will be further turnover, leading to the departure of many employees to competitors.  Feeling more vulnerable because of the downturn, employers will inevitably look to enforce restrictive covenants, including non-competes and non-solicitation agreements, against those former employees.  How will courts tend to handle requests to enforce restrictive covenants, especially non-competes, in this difficult economy?  One guide may be looking at how they handled similar requests during the last economic downturn in 2008 in the state of Ohio.
Continue Reading Back to the Future: Do Restrictive Covenant Cases from the 2008 Recession Offer Clues to How Courts Will Rule in the Aftermath of COVID 19?

A recent decision by U.S. District Court for the Northern District of Illinois addresses a very timely and novel question:  can a website provider enforce the equivalent of a covenant not compete through an online clickwrap agreement?  In TopstepTrader, LLC v. OneUp Trader, LLC, Case No. 17 C 4412 (N.D. Illinois June 28, 2017), the U.S. District Court for the Northern District of Illinois rejected one website provider’s effort to do just that, reasoning that the provider was attempting to use its website’s terms and conditions to improperly restrict competition under Illinois non-compete law.  The opinion, which can be found here, may prove to be a significant one as courts wrestle with the enforceability of online terms of condition that may limit competition or the use of information publicly available through those websites.  (A shout out to Evan Brown’s Internet Cases for first reporting on this case).
Continue Reading Can A Website Provider Use A “Clickwrap” Agreement to Enforce A Non-Compete?

Given the increasing number and quality of fine posts about trade secret, non-compete and cybersecurity issues, I am resurrecting my regular updates post  (although it will be monthly rather than weekly).  Without further adieu, here are the noteworthy posts of the past month:

Defend Trade Secrets Act:

  • With the recent passage of the 1-year anniversary of the DTSA, there have been a number of interesting posts that have detailed compilations about the cases filed with DTSA claims over the past year.    Professor David Opderbeck of Seton Hall has an interesting guest post for Patently O and Fish & Richardson’s Claire Collins, Jeffrey Schneidman and Carol Simons have some noteworthy statistics in their Litigation Blog as well.
  • Finnegan’s John Williamson, Paula Miller and Jon Self have a guest post nicely summarizing the extra-territorial reach of the DTSA and other statutes for the IP Watchdog.
  • Robert Milligan and Josh Salinas offer their take on likely developments for the DTSA in its second year in Seyfarth’s Trading Secrets Blog.
  • Maxwell Goss has a post that suggests that reports of the death of the inevitable disclosure doctrine under the DTSA may be greatly exaggerated in his Law and the Creative Economy Blog.

Continue Reading Monthly Wrap Up (June 16, 2017): Noteworthy Trade Secret, Non-Compete and Cybersecurity Posts from the Web