Category Archives: Trade Secrets Protection/Noncompetes

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What To Do When You Hire A Thief

Trade Secrets
Employers victimized by trade secret misappropriation appropriately express righteous outrage, both at the offending ex-employee and sometimes at the new employer. However, on another day the roles can reverse: That same employer may unwittingly — or worse, intentionally — have hired someone who has stolen trade secrets or confidential information. Failure to take appropriate precautions … Continue reading this entry

Federal Attack on Non-Competes Likely Another Casualty of Election

di_trade
As our readers are aware, employers can expect that the Trump administration will usher in a plethora of changes in terms of federal employment law policy and enforcement. One particular area in which the new administration may do an about-face is its position on enforcement of non-competition agreements.… Continue reading this entry

Use of Non-Compete Agreements – Too Much of a Good Thing?

li_trade
In case you missed the trend, several recent actions by the Obama administration have been aimed at enhancing employee rights. This pattern continued last week, when the White House issued a “Call to Action” and a report on Non-Compete Reform: A Policymaker’s Guide to State Policies, expressing concern about overuse of non-compete agreements. Unlike recent … Continue reading this entry

State Attorneys General on the Attack Against Noncompete Overuse

di_trade
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 of continuing employment. In recent months, however, state attorneys general, specifically in New York and Illinois, have put significant heat on … Continue reading this entry

You Cannot Create A Restrictive Covenant Out of Thin Air

li_trade
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 from Company A. Mr. B had left Company A and remained in touch with his old colleagues. In fact, … Continue reading this entry

Dealing With Trade Secret Thieves: Strategies for Cost-Effective Settlement

li_trade
Trade secret thieves are almost always an employee or business associate. They are known, generally held the trust of the business, and are perceived as traitors. The urge for retribution against such trade secret thieves can be hard to resist. Retribution often takes the form of aggressive litigation. But if a business brings such litigation … Continue reading this entry

Recent Developments Again Call for Timely Review of Restrictive Covenants

di_trade
We have suggested before that employers should view non-competition and other restrictive agreements as “live” documents, warranting regular examination to ensure they are deployed with appropriate precision and account for frequent legal developments. Four such recent developments once again suggest that a review, and most likely revision, of your confidentiality, trade secret, and non-competition agreements … Continue reading this entry

Protecting Trade Secrets Now Front, Center and National

Trade Secrets
Most employers understand, in this era where information moves so quickly and critically sensitive commercial information is very easy to move, that protecting trade secrets is more important than ever. In fact, the U.S. Senate Judiciary Committee reports that annual losses to the American economy caused by trade secret loss are over $300 billion in … Continue reading this entry

Five Tips for Retaining Employees in a Competitive Business Climate

Workplace Culture
Attracting and retaining employees is always a challenge. After you provide an employee with a good job, training and development, customer contacts, and access to trade secret and other confidential information, it is discouraging, to say the least, when the employee then uses all of that to help another business compete against you. Regardless of … Continue reading this entry

Avoiding Non-Enforcement of Non-Competes

li_trade
The use of non-competition agreements to protect a company’s relationships and sensitive information is a relatively common practice. What can be less common, however, is careful use of non-competition agreements, with the potentially damaging consequence of making a non-compete unenforceable at a time when protection of business interests is critical.… Continue reading this entry

An Employee Stole Your Trade Secrets but You Cannot Prove It. Now What?

li_trade
Consider the following, relatively uncommon scenario: an employee stole your trade secrets and went to work for a competitor. You know the employee did it, you just cannot prove it. Even with the best forensic analysis it is not always possible to identify, specifically, what an employee took. You need to do something, but what? … Continue reading this entry

Thieves Among Us? Protecting Trade Secrets From Employee Theft

da_trade
Employee trade secret theft is a serious problem, and getting worse. According to an analysis of federal court cases filed over a 58-year period, 85 percent of trade secret theft was committed by employees or business partners. In addition, the cases doubled from 1988 to 1995 and again from 1995 to 2004, with a trajectory … Continue reading this entry

Don’t Let the Door Hit You … Oh, and I Have a Few Questions Before You Go

di_trade
Regardless of how great you are as an employer, not all of your employees will stick around forever, especially your most valuable employees. If the employee is valuable to you, you can be sure he or she would be just as valuable, if not more so, to a competitor. When the day comes to say … Continue reading this entry

Using Non-Competes When Greater Employee Responsibility = Greater Protectable Interest

da_trade
Many employers require new hires to sign non-compete agreements and we have advised previously about best practices for employers to refresh their non-compete terms on a regular basis. A recent decision by a Maryland federal court illustrates a terrific, practical application of one practice to tighten up restrictions on employees after their employment has begun. Though … Continue reading this entry

Next-Generation Manufacturing Should Place Greater Emphasis on Trade Secret Concerns

li_trade
Picking up on our discussion last week about the pending Defend Trade Secrets Act of 2014, recent testimony by Eli Lilly’s Vice President and General Patent Counsel, Douglas K. Norman in support of this legislation offers a good example of why a set of enhanced and uniformed laws for the protection of trade secrets in … Continue reading this entry

Uncle Sam Wants You to Protect Trade Secrets (Maybe)

As business in the United States has increasingly focused on technology development, and as companies are looking to gain market advantages by developing processes and methods intended to increase their competitive position, preservation of trade secrets has become increasingly important. The U.S. Government has not failed to understand this; in recent years it has passed legislation … Continue reading this entry

Does Your 2014 “To Do” List Include Updating Your Company’s Trade Secret Protections?

As you consider the tasks you did not quite finish in 2013 and look ahead to 2014, we recommend including on your to-do list a review of your company’s practices and procedures for protecting its valuable, proprietary information. Chances are that your company engaged in significant efforts in the past year to enhance its competitive … Continue reading this entry

Trending Issues in the Prosecution of Trade Secret Theft

A year ago, we reported on a recent important change to the Economic Espionage Act (“EEA”), making the theft, transmission, or receipt of trade secrets a federal crime. The change clarifies that the EEA does not only apply to “products” that a company sells or intends to sell, but also applies to “services” without regard … Continue reading this entry

The Need to Update Noncompetes, and the Legal and Practical Issues Associated With Doing So

If employers want their noncompete agreements to work, and keep working, it’s critically important that they update those agreements on a regular and repeated basis. Over time things change, and those changes can affect key things that impact the enforceability of a non-compete, such as:   – The contours of state law change with each … Continue reading this entry

Illinois Strikes Down Restrictive Covenant

On June 24, 2013, an appellate court in Illinois made it more difficult for Illinois employers, including those in the automotive industry, to enforce non-solicitation and non-competition provisions. Specifically, the court determined that such restrictive covenants won’t be enforceable unless the employee in question works for at least two years after signing the restrictive covenant. … Continue reading this entry

The Penalties for Stealing Trade Secrets Just Became Worse

When the U.S. Congress enacted it in 1996, the Economic Espionage Act (EAA) made the theft, transmission, or receipt of trade secrets a federal crime. Two recent amendments to the law add new teeth to the law and suggest that employers might be wise to revisit their trade secret policies, protection mechanisms, and training programs … Continue reading this entry

Preventing Unfair Competition in the Absence of a Noncompete Agreement

A key executive, top salesperson, or high-level engineer is joining a fierce competitor after being exposed to your company’s most confidential and proprietary information and trade secrets. The business leaders are very upset and demand action, but for one reason or another — company or industry culture, hiring needs, oversight, deception — there is no … Continue reading this entry