Non-Solicitation Agreements

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”:

Hawaii

 

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:

  1. Signed Agreements – Make sure the non-compete agreements at issue are signed.  Some companies have their employees execute agreements on line

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When news of the Jimmy John’s non-compete came out last October my concern was the impact it would have on businesses with legitimate non-competes.  There is always a populist theme that is anti-non-compete.  Employees should be able to come and go as they please and a non-compete agreement prevents that.  “Bad” non-competes undermine “good”

It’s been 3 and a half  years since the Marsh opinion that redefined what could constitute consideration for a Texas non-compete and courts have bee relatively quiet on non-competes since then.   That’s not surprising from the Texas Supreme Court as Marsh was the third of a trilogy of opinions dealing with the subject.  Appellate courts

Original Complaint Filed by Amazon
Original Complaint Filed by Amazon

In Seattle, former Amazon Web Services Strategic Partnership Manager Zoltan Szabadi was sued by Amazon for violation of his non-compete agreement.  Szabadi is now with Google in their cloud platform business.  The lawsuit alleges:

Szabadi was directly and integrally involved with the marketing of Amazon’s cloud

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A few months ago I confronted another FaceBook related case where we were arguing over what level of FaceBook activity constituted a solicitation in violation of a non-solicitation covenant.  I’ve previously discussed this issue and given the sage advice that you’ll know it when you see it.  I’m not so sure that’s such sage advice

Last year we profiled the TEKSystems v. Hammernik case that was filed in the United States District Court for the District of Minnesota.  The case was significant because it was one of the first where a Plaintiff seeking a temporary injunction used communications from social media (LinkedIn) as evidence of a non-solicit violation. 

                                                         

We have previously addressed rumblings that the Department of Justice was investigating agreements between companies where they agreed not to contact each other’s employees for hiring purposes. 

The companies involved were Adobe, Apple, Google, Intel, Intuit and Pixar.  In the competitive impact statement, the DOJ outlined the nature of the agreements.  For example,