By: James Kachmar

When one or more of your key employees leaves to join a competitor and begins soliciting your customers, one of your strongest weapons under California’s trade secret laws is the ability to obtain an immediate temporary restraining order to stop your former employee and his or new employer from unlawfully competing against you. Many trade secrets cases can be won or lost at the early TRO/preliminary injunction stage. However, it is imperative that employers act fast to protect their rights or they may find that their trade secret case is weakened. Employers may, when faced with departing employees who are soliciting their customers, take a wait and see approach to determine the amount of damage and whether it is worthwhile to hire an attorney to pursue the matter in the court system. While this may make sense from a business approach, it can adversely impact the employer’s remedies should it eventually decide to pursue a lawsuit.


Continue Reading Employers: Act Fast or Weaken Your Trade Secret Case

Thursday, May 17, 2012
9:00 a.m. – Registration and Breakfast
9:30 a.m. – 11:30 a.m. – Program
400 Capitol Mall, 11th Floor, Sacramento, CA

Can You Keep a Secret?

From trade secrets like product recipes and algorithms to confidential details about financing, customers and costs, all businesses have information that could be devastating if it were to fall into a competitor’s hands.


Continue Reading UPCOMING SEMINAR: Protecting Trade Secrets – How to Manage Employee Use of Proprietary Information

Kevin Gagnon, doing business as “Mister Computer,” alleged that his former customer, Asset Marketing Systems (AMS), infringed his copyright in six computer programs that he wrote for AMS by continuing to use and modify them without his consent and that AMS misappropriated trade secrets contained in the programs’ source code. After AMS terminated its contract

In Edwards v. Arthur Andersen, LLP, Case No. BC294853 (August 7, 2008) the California Supreme Court holds that non-solicitation of customer agreements are per se unenforceable unless they fall within the statutory or other exception permitted under the law. California law has long protected the rights of employees to lawfully pursue any trade or profession. For more than 100 years California law has invalidated any agreement between an employer and an employee which purports to limit or restrict an employee’s ability to work in their trade or profession following the employment. Many other states permit such “non-compete” agreements between employers and employees as long as the restraints on competition are reasonable. In the Arthur Andersen case, the California high court rejected arguments that more narrow agreements – those that limit a former employee’s ability to solicit the former employer’s customers for some specified period of time – did not run afoul of Business and Professions Code §16600 and thus, were valid.

California’s Business and Professions Code §16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void, except as provided in this Chapter [§§16600-16602.5].”
 


Continue Reading California Supreme Court Rejects Contracts Restricting Former Employee’s Ability To Solicit Customers: Edwards v. Arthur Andersen, LLP