Employee Mobility

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 this year has been for trade secrets protection, it’s been every bit as bad for noncompete agreements.
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Government Involvement in Noncompetes… Against a Sandwich Maker?! Jimmy John’s Slapped With Another Lawsuit, This Time Brought by the Illinois Attorney General

Jimmy John’s can’t seem to escape the limelight. Last year, the company made headlines (discussed here) when employees hit it with a putative class action lawsuit seeking to invalidate their non-compete agreements. The District Court determined that the employees did not have standing to pursue their claims, and never reached the issue of whether the non-competes were valid. Just last month, the Illinois Attorney General filed suit against Jimmy John’s over the same non-compete agreements.  READ MORE

Trade Secrets in the Fast Lane – Formula One and the Importance of Trade Secret Protection

For a competition to be friendly, it should be scrupulously fair.” The Formula One world was recently jolted by allegations that a former Mercedes-Benz AMG engineer took highly-confidential information in anticipation of joining Mercedes’ chief competitor Ferrari. Mercedes recently filed suit in the High Court of Justice in the United Kingdom. To many in the Formula One world, the recent news is reminiscent of 2007’s “Spygate” controversy involving confidential technical data misappropriated from Ferrari. Nearly a decade later, the recent allegations underscore an important facet of Formula One: Formula One teams go to extraordinary lengths to protect their design secrets created at a cost of hundreds of millions of dollars. READ MORE

At Risk: Law Firms Bringing Bad Faith Trade Secrets Claims

Companies get anxious when key employees leave to start new ventures. A company may try to shield itself from the risk of losing confidential information by seeking an injunction preventing its former employees and their new company from using or disclosing trade secrets. However, without sufficient evidence of actual misappropriation or threat of imminent harm, a company may face sanctions for bringing a misappropriation claim in bad faith, as Trade Secrets Watch has previously discussed. Filing or maintaining a premature misappropriation action carries other risks. Currently before the California Supreme Court is a malicious prosecution claim against a law firm for pursuing a meritless misappropriation suit. Parrish v. Latham & Watkins, LLP, No. S228277 (Cal. petition for review granted Oct. 14, 2015). READ MORE

Filer Beware! E-Filing Error Can Destroy Trade Secret Status

First rule of thumb in trade secrets litigation? A trade secret must be kept secret. It is painfully obvious, but modern practitioners must not grow complacent due to the convenience of electronic filing. Although trade secrets law does not command absolute secrecy, a recent e-filing snafu in HMS Holdings Corp. v. Arendt offers a cautionary tale from New York on how one botched upload could jeopardize a client’s most prized possession. READ MORE

One Step Closer: European Parliament Legal Affairs Committee Approves Trade Secret Directive

As Trade Secrets Watch has previously reported, new rules regarding the protection of trade secrets are on the horizon for the European Union. In November 2013, the European Commission announced a proposed Directive on trade secrets and confidential information. Around six months later, in May 2014, the Council of the European Union agreed on a revised draft Directive. Reception of the Trade Secrets Directive has been mixed. READ MORE

For Here or To Go? Senators Introduce Bill to Ban Noncompete Agreements, Increase Mobility For Sandwich Makers and Other Low-Wage Workers

Congress is getting into the non-compete business.  Citing the use of non-compete agreements by companies such as Jimmy John’s sandwich shops, Senate Democrats recently introduced a bill—called the Mobility and Opportunity for Vulnerable Employees (MOVE) Act—that would amend the Fair Labor Standards Act (FLSA) to prohibit the use of non-compete agreements for low-wage employees. READ MORE

All Bets Are Off: Kentucky Downs Trade Secrets Case Presents Novel Question Under Kentucky’s Uniform Trade Secrets Act

Earlier this month, AmTote International, Inc. sued the famed Kentucky Downs racetrack, three high-ranking Kentucky Downs employees, and Encore Gaming, LLC in federal court alleging misappropriation of trade secrets related to horse racing betting machines.  AmTote’s lawsuit presents the interesting question of whether the “inevitable disclosure” doctrine applies under Kentucky law. READ MORE