A new decision from the U.S. Court of Appeals for the 6th Circuit reminds us how important choice-of-law can be in non-compete agreements. In this case, the choice of law clause was likely the difference between success and failure for an employer seeking an injunction enforcing its non-compete. Continue reading
Many believe that a non-compete agreement is never enforceable in California. A recent decision by the California Court of Appeal shows that there may be some protection afforded by such an agreement, at least as against competition during the employment relationship. Continue reading
After working for nearly three decades at CVS Pharmacy, Inc., including in senior-level jobs, John Lavin accepted a new position at a company called PillPack LLC, a direct competitor of CVS. PillPack is an online retail pharmacy founded in 2013 and wholly owned by Amazon.
At four points during his employment as a senior vice president, CVS required Lavin to sign a restrictive covenant agreement (“RCA”). Each RCA contained non-competition, non-solicitation, and nondisclosure covenants. The RCAs defined competitors of CVS but contained no geographic limitations. Each time Lavin signed a RCA, he was awarded CVS stock.
CVS Obtains A Preliminary Injunction Enforcing The Non-Compete
CVS sued Lavin and moved for a preliminary injunction, which was granted. Continue reading
The Indiana Supreme Court has reaffirmed its narrow interpretation of the “blue pencil” doctrine, holding that courts may not add terms to an overbroad non-solicitation or non-competition provision to make it reasonable even if the contract has a reformation clause.
As the court puts it: “This doctrine … is really just an eraser.” Continue reading
Non-compete agreements are in the cross-hairs of both federal and state officials, who are looking to ban non-competes in many instances. Senate Bill 2614, introduced on October 16, 2019, if enacted, would outlaw most non-compete agreements as a matter of federal law. There would be a few limited exceptions. In addition, the Attorneys General of nearly twenty states and the District of Columbia have urged the Federal Trade Commission to use its rulemaking authority to end the use of non-compete clauses in employment contracts. Continue reading
The Nevada Supreme Court reversed an injunction entered by a district court, when it found the employer failed to put on sufficient evidence to justify an injunction enforcing a 50-state non-compete against a former employee. Here’s what happened. Continue reading
A federal court, in a non-competition setting, had to untangle the relationship between three separate agreements. One contained an arbitration provision but the others did not. Ultimately, the court determined that some parties had to arbitrate some claims but that others did not have to arbitrate. Continue reading
Sometimes a party to a contract gets greedy. As an example, sometimes a party seeks an onerous non-competition provision in a contract. Will a court enforce it? Will the court modify the agreement if it is too broad in some respect? Let’s see how this played out in a real case. Continue reading
Although many restrictive covenants prohibit solicitation, there is comparatively little case law discussing in detail what “solicitation” means. A new Illinois Appellate Court decision sheds some light on the meaning of this key term.
Quality Transportation Services, Inc. v. Thompson Trucking, Inc., 2017 IL App (3d) 160761 involved a contract dispute arising from the language of a transportation brokerage agreement. Continue reading