Trade Secrets and Competition

In the bustling craft brew transparenteconomy brewers are faced with new issues every day. One that recently came to my attention arises when the craft brewery’s brewmaster or head brewer decides to either start his own craft brewery, or go to work for another brewery. While this may not initially seem like a big deal, it gets much more complicated when that brewmaster or brewer is responsible for the creation of your flagship brew. The question arises: who owns the intellectual property rights to that brew? Of course, the brewery is going to say that they have been selling, distributing, and promoting the brew, so it must be theirs. On the other hand, the brewer is going to say that he created it, so it must be his. The truth is that determining who owns the intellectual property rights to the brew formula can get quite complicated, encompassing numerous factors. But it does not have to be.

With a booming industry such as craft brew, it is imperative that the appropriate precautions be taken to protect the craft brewery’s most lucrative asset: the beer itself. In order to protect a brew formula from being taken from your company and utilized by a competitor when one of your brewers, the creator of the formula or not, leaves the company, the formula must be treated as a trade secret. The California Uniform Trade Secrets Act (“UTSA”) defines a trade secret as:

information, including a formula, pattern, compilation, program, device, method, or technique, or process, that:
(1) derives independent economic value, actual or potential, from not being generally known to the public, or to other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Continue Reading Hey, that’s my beer! I think…

Summary of Program

Companies and their employees widely use social media in their daily business activities.  These networking sites are used by employees to communicate with one another as well as current and potential customers.  However, the use of social media may occasionally adversely impact an employer’s business or present other legal risks.  What should

The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was not hired because of discrimination.  This common provision is basically an agreement by the employee that in exchange for consideration, usually the payment of a sum of money, he/she will dismiss their claims against the employer and will contractually agree not to seek to be rehired.  A recent decision from a panel of judges in the Ninth Circuit, however, has called the “No Rehire” provisions into question as possibly violating section 16600 of the Business and Professions Code.James-Kachmar-08_web

In Golden v. California Emergency Physicians Medical Group, the plaintiff doctor sued after he lost emergency room privileges at one of CEPMG’s facilities.  Prior to trial, the plaintiff doctor agreed to settle his claim for the payment of a large sum of money and initially agreed (at least orally through counsel) not to seek employment with CEPMG again.  The “No Rehire” provision that was subsequently incorporated into a written settlement agreement provided that the plaintiff doctor would not seek re-employment with CEPMG and also provided CEPMG the right to terminate the plaintiff’s employment should he be working at any facility that it subsequently acquired.  (CEPMG is a large consortium that manages or staffs many emergency rooms, in-patient clinics and other facilities in California and other Western states and intends to continue expanding.)

After the plaintiff doctor refused to sign the written settlement agreement containing the “No Rehire” provision, his former counsel filed a motion to enforce the settlement agreement (apparently to obtain his contingency fee from the settlement proceeds).  The District Court concluded that the “No Rehire” provision was not a “non-compete” provision and therefore did not run afoul of section 16600.  The Court ordered plaintiff to execute the written settlement agreement containing the “No Rehire” provision.
Continue Reading Are “No Rehire” Provisions in Settlement Agreements at Risk?

LaborEmpSeminarLogoSummary of Program

Most employers know that it is crucial to have well trained supervisors to help ensure that rank and file employees perform their jobs effectively and efficiently.  However, many employers don’t realize how important it is that supervisors be trained to understand the many employment laws that govern the workplace.  Untrained supervisors can take actions (or fail to take actions) that result in significant legal consequences for an employer.  Come join the employment lawyers at Weintraub Tobin for a discussion of best practices for training supervisors and reducing the potential for liability.

Program Highlights

  • An overview of employment laws that impact the workplace and common mistakes supervisors make when they don’t understand those laws.
  • Tips for effective communication between supervisors and employees, including how to give constructive performance feedback.
  • Common supervisor mistakes when hiring and firing.
  • The importance of consistent, objective, and timely discipline.
  • Preventing and responding to harassment and other Equal Employment Opportunity complaints.
  • Documentation:  The good, the bad and the ugly.

Continue Reading Upcoming Seminar: Well Trained Supervisors – Your First Line of Defense

This blog has previously reported on the anti-poaching cases involving various tech companies in Silicon Valley.  The cases arise out of alleged agreements between various tech companies not to recruit each other’s employees.  The U.S. Department of Justice brought antitrust actions as a result of these alleged agreements which resulted in the companies entering into