Smooth Transitions

Smooth Transitions

addressing the Legal issues arising from the departure of employees & Business breakups

Category Archives: Trade Secrets

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Don’t Steal My Employees When You Quit – the Anti-Raid Provision

Posted in Anti-Raid, Confidentiality, Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets, Uncategorized
  The usual gamut of post-employment covenants includes non-compete restrictions, non-solicitation of customer restrictions, confidentiality restrictions, and in many cases the anti-raid provision designed to keep a departing employee from hiring away a former employer’s employees and contractors.  The anti-raid is not always given a lot of thought, but it should be.  Why?  Because when… Continue Reading

The Non-Compete Buyout

Posted in Hiring and Firing, HR Issues, Injunction, Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets
  One option we’ve never spent much time discussing here as it relates to non-competes is the buyout option – on both sides.  Buying out a non-compete is neither new nor novel.  Physician non-competes in Texas require that the non-compete provision include a buyout option.   The statute provides: the covenant must provide for a… Continue Reading

NY Times Non-Compete Article

Posted in Injunction, Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets
I don’t think I’ve ever dedicated a post to a newspaper article but a recent New York Times article entitled “How Noncompete Clauses Keep Workers Locked In” does a great job addressing the human toll of non-competes.  Here is a link to the article.  The article is generally anti-non-compete when it comes to lower paid… Continue Reading

Texas Non-Competes Without Geographical Restrictions

Posted in Injunction, Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets
A Texas non-compete must satisfy two main components to be enforceable. The non-compete has to be ancillary to an otherwise enforceable agreement and be reasonable in time and scope. Before the Texas Supreme Court this week was a case where the court was asked to consider a non-compete without a geographical restriction and consider whether such an… Continue Reading

President Obama and Non-Competes

Posted in Non-Compete Agreements, Trade Secrets
  Nobody likes non-competes except business owners/leaders trying to use them to protect their business.  It is the proverbial political softball that some legislatures attempt to address every session.  In May the Obama Administration took on non-competes and released a report entitled  “Non-Compete Agreement: Analysis of the Usage, Potential Issues, and State Responses”.  The report is… Continue Reading

My Attorneys’ Fees Please (Texas Trade Secrets)

Posted in Trade Secrets, Trial and Pre-Trial Procedure, Uncategorized
  Inevitably whenever I talk with a client there is always the discussion about attorneys’ fees and how to get the other side to pay them.  The unfortunate reality is there are very limited circumstances where attorneys’ fees are recoverable.  The US has the “American Rule” which generally means that each party pays their fees.… Continue Reading

You want to exclude my client from the courtroom?

Posted in Injunction, Recent Cases, Trade Secrets, Trial and Pre-Trial Procedure, Uncategorized
Imagine you are int he courtroom with your lawyer in a trade secret lawsuit.  Your company is accused of stealing trade secrets from a competitor.  Then imagine the Judge tells you you have to leave the courtroom because the other side does not want yout to hear what its trade secrets are.  This issue (though… Continue Reading

The Fifth Circuit Chimes In on Inevitable Disclosure

Posted in Recent Cases, Trade Secrets, Trial and Pre-Trial Procedure, Uncategorized
We’ve discussed the inevitable disclosure doctrine in previous posts.  It’s a powerful claim and whether adoption of the uniform trade secrets act makes it viable in Texas remains to be seen.   What is it?  Assume that in your prior job you were exposed to certain trade secrets of your employer that you would “inevitably” use in… Continue Reading

Top 10 From Texas Non-Compete Camp

Posted in Arbitration, Confidentiality, Non-Compete Agreements, Non-Solicitation Agreements, Presentations, Trade Secrets, Trial and Pre-Trial Procedure
Last week I had the privilege of speaking and attending the Texas Non-Compete Camp put on by UT LAW CLE and Mike Maslanka.  There were a number of great lawyers there addressing topics ranging from whether to sue the new employer of a former employee to ethical considerations of representing both the employee and employer.… Continue Reading

Hawaii Non-Compete Legislation

Posted in Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets, Uncategorized
It’s always interesting to take a look at other states to see how they deal with non-compete legislation.  We’ve discussed Masschusetts and most recently doctor non-competes in New Mexico.  Hawaii is the latest state to enact new noncompete legislation targeting workers in a “technology business”.  This is how the Hawaii legislature defined “technology business”:  … Continue Reading

5 Injunction Non-Compete Lessons

Posted in Injunction, Non-Compete Agreements, Non-Solicitation Agreements, Trade Secrets, Trial and Pre-Trial Procedure, Uncategorized
For the last few months I’ve been involved in a number of temporary restraining order/preliminary injunction cases in state and federal courts in a number of different industries/professions. Some general reminders/lessons from non-compete/non-solicit fights: Signed Agreements – Make sure the non-compete agreements at issue are signed.  Some companies have their employees execute agreements on line… Continue Reading

Texas Employers and the Trade Secrets Act

Posted in Trade Secrets
                          At the beginning of the September, the State of Texas followed the majority of other states becoming the 48th to adopt a version of the uniform trade secrets act. So the question becomes, why does this matter to my business or in the context of the employee/employer relationship? Though the instances where true “trade… Continue Reading

Why you should scrub departing employees’ emails.

Posted in Trade Secrets
                                         In a recent entry in the Delaware Employment Law blog, Molly DiBanca recounts the story of a employee who gives two weeks notice of intent to resign and then proceeds to email confidential and proprietary information to his new employer from his work email account. Note to employers, lock down or at least seriously monitor… Continue Reading

Hurd, HP, and Inevitable Disclosure

Posted in Trade Secrets
                                   As you probably know, HP filed a lawsuit against former CEO Mark Hurd in California seeking to prevent him from going to work for competitor Oracle.  The Wall Street Journal has a solid account of the lawsuit and analysis of the claims. The lawsuit asserts causes of action against Hurd for breach of… Continue Reading

The Phone Book Defense

Posted in Trade Secrets
                                              As discussed previously, in some situations Texas courts will afford customer lists trade secret protection.  In most non-solicit/non-compete cases, the departing employee doesn’t walk out with the company customer list.  In some cases that list doesn’t exist.  In other cases the former employee will simply reconstruct the customer list from memory, contact information they… Continue Reading

Are customer lists trade secrets? Sometimes.

Posted in Trade Secrets
                                                 In a breach of non-compete or non-solicit lawsuit, the former employer will almost always claim their customer lists are trade secrets.  Texas Courts consider the following factors when determining if something is a  trade secret: (1) the extent to which the information is known outside of his business; (2) the extent to which it is… Continue Reading

Employee Departures and Trade Secrets

Posted in Trade Secrets
                                                   In a survey of 950 former employees, 60 percent admitted to taking confidential information from their former employers.  Most of the data takers (53 percent) said they downloaded the information onto a CD or DVD, while 42 percent put it on a USB drive and 38 percent sent it as attachments via e-mail, according… Continue Reading

Non-Compete Enforcement Tips

Posted in Injunction, Non-Compete Agreements, Trade Secrets
                      I liked Jay Shepherds’ remarks in Eight Ways to Lose a Non-Compete Case blog entry.    Here they are with my thoughts in italics: Putting too much faith in the belief that the court will enforce the language of the non-compete agreement as written. Trying to enforce a non-compete against employees who really don’t… Continue Reading
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