To Delete or Not to Delete? Illinois Federal Court Helps Answer Question for Employees Changing Jobs

Illinois, Employment Agreements, Spoliation, Confidentiality Clauses, Trade Secrets

A common issue in employee transitions is how to deal with company information on an employee’s phone or personal laptop. Should the employee simply delete it? Or should a forensic copy be made before deletion to preserve evidence in anticipation of litigation?

A recent decision by U.S. District Court for the Northern District of Illinois gives comfort to those who opt for the more pragmatic approach of simply deleting the data. Even so, the case suggests steps that could have been taken to avoid litigation and a claim of destruction of evidence.  Continue reading

When Is a Trade Secret Not a Trade Secret? When You Don’t Protect It Like One

Non-compete, confidentiality clauses, nondisclosure, employment agreements, Illinois

In Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp.3d 888 (N.D. Ill., 2019), U.S. District Court Judge Tharp of the Northern District of Illinois provides a virtual checklist of the steps a company should consider if it wants its important information to be treated as a trade secret. Alternatively, the decision serves as a valuable reminder of what happens if an employer fails to implement appropriate protective measures. Continue reading

The Devil Is in The Details: Second Circuit Reverses Injunction For Lack of Specificity Required by Rule 65

rules-1752415_1280

A recent decision by the U.S. Court of Appeals for the Second Circuit serves as a timely reminder of the importance of complying with Rule 65’s requirement that injunctions describe the prohibited conduct “in reasonable detail.” Fail to comply and you could find yourself with an invalid injunction. Continue reading

Inevitable Disclosure Is No Substitute For Post-Employment Non-Competition Provision

Non-Compete, Nondisclosure, Trade Secrets, Illinois, Inevitable Disclosure

In reversing the trial court’s grant of a preliminary injunction, the Illinois Appellate Court in Archer Daniels Midland Company v. Sinele et al., (2019 IL App 4th 180714, decided February 1, 2019) reminds employers that the doctrine of inevitable discovery is not a foolproof substitute for enforceable post-employment restrictions on competition.  Continue reading

Court Compels Arbitration of Non-Compete Claim Based on Arbitration Clause in Separate Agreement

Non-Compete, Non-Solicit, Arbitration Provision, DTSA, Illinois

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

Restrictive Covenant Drafting: Ten Tips to Avoid the Traps

Non-Compete, Non-Solicit, Restrictive Covenants

Tip 1: Choose your choice of law wisely and FIRST.

  • The law you choose to apply to a restrictive covenant is regularly outcome determinative in enforcement proceedings (e.g. Illinois’ rule on at-will employment as consideration, North Carolina’s rule on blue-penciling, Louisiana’s law on geographic scope, Florida’s statute on presumptive validity, etc.) 
  • And there are sometimes three or four states from which to pick:
    • where the employer or seller is located (state of incorporation or principal place of business)
    • where the employee or purchaser is located
    • where the place of performance is located.  
  • So take the opportunity to pick the law that is most likely to do what your client already presumes will be done: your restrictive covenants will be enforced.
  • Relatively speaking, Delaware –often the default state of incorporation– is a solid and defensible choice.

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Don’t Let Your Nondisclosure Provisions Convert Your Employment Agreement Into An Unenforceable Non-Compete

Nondisclosure, Non-Compete, Fay v. Total Quality Logistics, DTSA

In Fay v. Total Quality Logistics, LLC, the South Carolina Appellate Court determined that the confidentiality provision in an employment agreement was so broad that it needed to be reviewed under the standards applicable to non-competition agreements and, because it lacked a durational provision, held it unenforceable.   Continue reading