One focus of this blog is how an employer’s use of non-compete agreements often runs afoul of California’s Business and Professions Code section 16600. Generally, the employer finds that its “non-compete” agreement will be held unenforceable by a court should it seek to enforce one against a former employee. But what can happen when one
Trade Secrets and Competition
Another Door Closes on Non-Compete Agreements
By: James Kachmar
Readers of this blog will note that we frequently remind them that California law generally prohibits non-compete agreements. There are very limited exceptions to this general rule, one being that the seller of goodwill in a business can be bound by a valid non-compete agreement to protect the goodwill that is being purchased. Sometimes, the buyer of a company will want to continue to employ certain key employees, who can also be the sellers of the goodwill of the former company. We have seen instances where the purchasing company gets creative and subjects the seller/key employee to two covenants not to compete, one in the purchase agreement and the other in an employment agreement. Last week, a California appellate court shut the door on this approach in the case Fillpoint, LLC v. Maas.Continue Reading Another Door Closes on Non-Compete Agreements
Pleading Around CUTSA Preemption
By James Kachmar on
Posted in Trade Secrets and Competition
Readers of this blog will note our frequent reminders that preemption under California’s Uniform Trade Secret Act (“CUTSA”) can threaten other common law claims if not properly pled. A recent decision out of the Eastern District of California in Hat World, Inc. v. Kelly, 2012 U.S. Dist. Lexis 113060 (Aug. 10, 2012) reinforces this position.
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Steal Trade Secrets and Go to Jail
By James Kachmar on
Posted in Trade Secrets and Competition
While the bulk of trade secret litigation focuses on civil claims and remedies, an article from last week’s Chicago Tribune is a reminder that stealing trade secrets can have serious consequences. The Chicago Tribune story (link here: http://www.chicagotribune.com/business/breaking/chi-chinese-engineer-to-be-sentenced-for-stealing-motorola-secrets-20120719,0,1594304.story) reports that the sentencing for a software developer caught with taking Motorola, Inc.’s trade secrets will…
Surrender is Futile – Court of Appeal Affirms “Bad Faith” Attorney’s Fees Award in Trade Secrets Case
By Charles L. Post on
Posted in Trade Secrets and Competition
There are good, legitimate reasons for filing a trade secret and unfair competition case. The protection of trade secrets and proprietary information and protection against unfair conduct by competitors are just a few. There are also business reasons for bringing such a claim, including burdening a competitor or a startup competitor with the cost of …