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Showing 3 posts in Noncompete Agreements.

New Federal Defense of Trade Secrets Act Requires Employers to Re-Examine Employee Confidentiality Agreements

This week, President Obama signed the Defense of Trade Secrets Act (“DTSA”) into law, providing owners of trade secrets new federal protections against trade secret misappropriation. The new law has several features which will be discussed (and inevitably litigated) over the months and years to come, including a provision allowing courts to issue ex parte seizure orders of property containing misappropriated trade secrets, a definition of trade secrets broader than the definition in the Uniform Trade Secrets Act (UTSA), and a definition of misappropriation narrower than the one in the UTSA. For employers, however, a provision of the act may require that longstanding confidentiality agreements be re-examined. Read More ›

Illinois Appellate Court Ruling Imposes New Requirements on Employers Wishing To Issue Noncompetition Agreements.

The Illinois Appellate Court recently held that the promise of new employment alone provides insufficient consideration for post-employment restrictive covenants, such as non-compete and non-solicitation agreements, unless the new employee continues his or her employment for at least two years.

The new hire in Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, signed an “Employee Confidentiality and Inventions Agreement” that included two-year non-compete and non-solicitation provisions. The Agreement stated that the restrictive covenants would not apply if the employee were terminated without cause during the first year of employment. The employee quit three months later, went to work for a competitor, and filed suit with his new employer seeking a declaration that the Agreement’s restrictive covenants were invalid and unenforceable. Read More ›

Pending Legislation Threatens to Reshape Michigan Law Regarding Noncompete Agreements

Employers wishing to enter into noncompete agreements with their employees frequently attempt to issue those agreements after the employment relationship begins. Often, the desire to have such an agreement arises from a change in the employee’s status with the organization—after all, the employee that has worked his or her way up through the ranks may not have been privy to information that would make a noncompete important at the time they were hired. As employees become entrusted with more and more responsibility, however, careful employers may wish to prevent the employee from using that information for the benefit of a competitor. Although Michigan law permits issuance of a noncompete agreement to current employees for exactly that reason, pending legislation may end that practice. Read More ›