Restrictive Covenants, Confidentiality and IP

This Note provides an overview of non-compete agreements between employers and employees. Non-compete agreements are largely dependent on state law. This Note contains information that is general and not jurisdiction-specific. For information on state law requirements, see the State Q&A Tools under Related Content to the right.

This Note describes trade secrets and confidential information protections available to employers. It examines trade secret definitions and legal recourse, including misappropriation, tortious interference and breach of duty of loyalty and/or fiduciary duty claims. It also explores relevant restrictive covenants and best practices. This Note provides a general overview of federal law in this area. For information on state law, see the State Law Q&A Tools under Related Content to the right.

A model letter for an employer to send or provide to a departed or departing employee to remind him of his continuing obligations to the employer. These obligations may include compliance with restrictive covenants, including non-compete, non-solicit and non-disclosure provisions, and the continuing duty of loyalty. This Standard Document includes integrated notes with important explanations and drafting tips. It complies with federal law. State or local law may impose additional or different requirements.

An agreement between an employer and an employee concerning confidentiality and appropriate handling of the employer's commercially valuable information, compliance with relevant security rules and policies, and protection of the employer's intellectual property assets. Agreements of this type have various titles, which may use the term "non-disclosure" in place of "confidentiality," or "intellectual property" in place of "proprietary rights." This Standard Document is drafted in favor of the employer. It is based on federal law. For information on state law requirements, see the State Q&A Tools under Related Content to the right. This Standard Document has integrated notes with important explanations and drafting tips.

An agreement between an employer and an employee limiting an employee's competitive activities for a specified period of time after the employment relationship ends.  This Standard Document is drafted in favor of the employer. It is jurisdiction neutral. This Standard Document has integrated notes with important explanations and drafting tips. For information on state law requirements regarding non-competes and trade secret laws, see the State Q&A Tools under Related Content to the right.

A California-specific offer letter/short-form employment agreement for a non-executive specifying the terms and conditions of employment to be acknowledged and signed by the employee. It includes provisions addressing at-will, background check and credit report requirements and new pay notice requirements. This Standard Document has integrated notes with important explanatory and drafting tips. It is based on California law.

This Standard Clause provides sample language for a California-compliant non-compete provision in connection with the merger or sale of a business, including its goodwill, as authorized by Sections 16600 to 16602.5 of the California Business and Professions Code. It can be used as a stand-alone provision or incorporated into a written agreement with the seller of a business entity. This Standard Clause has integrated drafting notes with important explanations and drafting tips.

This Standard Clause provides sample language for a California-compliant non-solicitation of employees provision. It can be used as a stand-alone provision or incorporated into a written agreement with current or departing employees. This Standard Clause has integrated drafting notes with important explanations and drafting tips.

A Checklist outlining steps an employer should take when it suspects that a current or former employee may be violating a non-compete or non-solicitation agreement. Non-competes may also be referred to as covenants not to compete or non-competition agreements. This resource is jurisdiction-neutral. For information on state law requirements, see the State Q&A Tool under Related Content to the right.

A Checklist outlining best practices for employers drafting non-compete agreements with employees. This Checklist is jurisdiction neutral. For information on state law requirements regarding non-compete agreements, see State Q&A Tool under Related Content to the right.

This tool enables subscribers to search and compare PLC's Non-compete Laws State Q&A resources. Questions and answers address state-specific issues of enforcement, drafting, choice of law, reasonableness of restrictions, remedies and more. Simply select the questions and the jurisdictions that you are interested in and click the "Submit" button. To see all of PLC's State Q&As on Non-compete Laws, see State Q&A Guide to Non-compete Laws. To see all of PLC's State Q&As, including relevant Legal Updates since the publication date (under Related Content), see individual Q&As on the Labor & Employment State Q&As landing page.

A Q&A guide to non-compete agreements between employers and employees for private employers in Alabama. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in the Arkansas. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Colorado. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in the District of Columbia. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Georgia. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Illinois. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Iowa. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Kentucky. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Maryland. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answer to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Minnesota. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Missouri. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answer to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Nevada. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in New Jersey. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in North Carolina. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Oklahoma. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Pennsylvania. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Tennessee. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Utah. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answer to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Washington. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to non-compete agreements between employers and employees for private employers in Wisconsin. This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Non-compete Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Arizona. This Q&A addresses the state-specific definitions of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Colorado. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to trade secrets and confidentiality law for private employers in the District of Columbia. This Q&A addresses the District of Columbia definition of trade secrets and the legal requirements related to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Georgia. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Illinois. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Iowa. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Kentucky. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Maryland. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool). For a recent update on Maryland's new User Name and Password Privacy Protection and Exclusions law, see Related Content on the right.

A Q&A guide to state law on trade secrets and confidentiality for private employers in Michigan. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Mississippi. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Nevada. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in New Jersey. This Q&A addresses the state-specific definitions of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in North Carolina. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Oklahoma. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Pennsylvania. This Q&A addresses the state-specific definitions of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Tennessee. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Utah. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Washington. This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

A Q&A guide to state law on trade secrets and confidentiality for private employers in Wisconsin.  This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them.  Federal, local or municipal law may impose additional or different requirements.  Answers to questions can be compared across a number of jurisdictions (see Trade Secret Laws: State Q&A Tool).

This article considers how and when IFAs emerged, the characteristics of IFAs and the extent to which they are legal instruments. The international nature of IFAs and their development are also considered. This article is part of the PLC multi-jurisdictional guide to employment and employee benefits. For a full list of contents visit www.practicallaw.com/employment-mjg.

Originally, non-competition agreements were predominately limited to competition activities within the country where employees have previously performed their work duties. In the global marketplace, these agreements are now increasingly concluded in the context of cross-border labour mobility. This article considers the two principal concerns that arise for employers and their companies in this international context when considering applying and enforcing non-competition agreements: The law the employer and the employee have chosen to apply to the non-competition agreement may not apply. In the event of a legal dispute, the appealed local court may not have jurisdiction to settle the dispute. The authors examine these risks and solution strategies by scrutinising the legal framework for cross-border mobility connected to at least one of the EU member states, outlining some key actions to take to build a successful strategy for handling these challenges from a European law perspective. For a full list of recommended labour and employee benefits lawyers and law firms, please visit PLC Which lawyer? This chapter is part of the PLC multi-jurisdictional guide to labour and employee benefits. For a full list of contents visit www.practicallaw.com/labour-mjg  

Colorado recently enacted House Bill 13-1046, which prohibits an employer from requesting, requiring or causing employees or applicants to disclose social media user names or passwords.

Arkansas recently enacted Act 1480, which prohibits an employer from requiring or requesting a current or prospective employee to disclose his username or password for a social media account.

Utah recently enacted the Internet Employment Privacy Act (IEPA), which bans employers from asking employees and job applicants to provide login information for their personal internet accounts. 

In AllianceBernstein L.P. v. Atha, the Appellate Division of the New York State Supreme Court held that a trial court could not compel a financial analyst to provide his personal iPhone to his former employer's attorneys in trade secret litigation. The Appellate Division held that the court should perform in camera review of the phone to determine which information was relevant to his former employer's discovery request. 

This Law Firm Publication by Epstein Becker & Green, P.C. discusses a California Court of Appeal's recent decision in Wanke, Industrial, Commercial, Residential, Inc. v. Superior Court, upholding a stipulated injunction that prohibited employees from soliciting specific customers from their former employer. Wanke sued two former employees and their new company for misappropriation of trade secrets. As part of a settlement agreement, the parties entered into a stipulated injunction that prohibited the former employees from soliciting specific customers identified in a customer list. In response to Wanke's later motion to find the employees in contempt for having contacted a customer on that list, the district court held the stipulated injunction was invalid under California law as an unlawful restraint of trade. The Court of Appeal reversed, holding the stipulated injunction was enforceable as the district court properly had jurisdiction and the injunction was facially valid.

This Law Firm Publication by Ogletree, Deakins, Nash, Smoak & Stewart, P.C., discusses HB 1270, a new law effective July 14, 2012, which requires New Hampshire employers to provide job applicants with non-compete and non-piracy agreements either before or at the time they offer them a job or a change in their job classification. The law voids any agreements that are not entered into in compliance with the law. It is intended to protect employees from discovering after accepting a job or a promotion that they must sign restrictive covenants.

This Law Firm Publication by Ogletree, Deakins, Nash, Smoak & Stewart, P.C. discusses Millman v. Polymer Packing, Inc., in which the New Jersey Supreme Court held that an employer does not have an affirmative duty to inquire about the source of a confidential customer list that a new hire brings with him. The court found that the employer in Millman had no reason to think that the list was anything other than the employee's personal list of customers.

This Law Firm Publication by Epstein Becker & Green, P.C. discusses 21st Century Systems, Inc. v. Perot Systems Government Services, Inc., in which Perot Systems alleged that 21st Century Systems conspired to steal trade secrets. Perot Systems was awarded monetary damages for loss of goodwill, but the Virginia Supreme Court overturned this award because of insufficient evidence to establish value. Perot Systems relied solely on its actual sale to Dell, Inc., rather than comparing its loss of goodwill to the loss experienced by comparable businesses at the time they were sold.

This Law Firm Publication by Epstein Becker & Green, P.C., discusses the recent Missouri Supreme Court decision in Western Blue Print Co., LLC v. Roberts, affirming a tortious interference verdict against a manager who left to join a competitor. The court affirmed the verdict in large part because the manager convinced other employees to leave with her and deleted documents before resigning, hindering her former company's ability to compete with her new company.

This Law Firm Publication by Ogletree Deakins discusses Indiana's blacklisting statute in the context of the Indiana Supreme Court's decision in Loparex v. MPI Release Technologies, LLC, et al. In Loparex, the court for the first time offered a definition of blacklisting under the statute. Applying this definition, the court concluded that the statute does not cover suits brought by former employers to enforce noncompetes or protect alleged trade secrets.

This Law Firm Publication by Epstein Becker & Green, P.C. discusses the Connecticut Supreme Court's recent holding in University of Connecticut v. Freedom of Information Commission that a public agency may create and maintain trade secrets that are exempt from disclosure under Connecticut's Freedom of Information Act (FOIA). The decision gives public agencies, including public universities, the same rights as a private person to profit from research, investment and development of trade secrets under the Connecticut Uniform Trade Secrets Act.

The New Jersey Trade Secrets Act has been signed into law by Governor Christie. This law creates specific remedies for employers to protect trade secrets from misappropriation.

This Ogletree, Deakins, Nash, Smoak & Stewart, P.C. memorandum discusses Reliable Fire Equipment Company v. Arredondo, in which the Illinois Supreme Court held that courts may not use rigid, structured tests in determining whether a legitimate business interest exists as they analyze the enforceability of non-competition restrictive covenants. This decision resolves a split among the Illinois appellate courts.

This Jackson Lewis LLP memorandum discusses the US Court of Appeals for the First Circuit's ruling in OfficeMax, Inc. v. Levesque. Analyzing the case under Maine law, the court held that a one year non-compete clause had expired by the time the employer tried to enforce it more than a year after its predecessor in interest acquired the company that had initially obtained the non-compete agreement. The court reversed the grant of preliminary injunction and remanded the case.