Restrictive Covenants, Confidentiality and IP

A model letter for an employer to send or provide to a departed or departing employee's new employer to inform it of the employee's continuing obligations to the former 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.

A Checklist outlining best practices for employers drafting employee confidentiality agreements, sometimes referred to as confidentiality and proprietary rights agreements. This Checklist is jurisdiction neutral.

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.

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 Standard Clause provides sample language for a California-compliant non-solicitation of customers 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 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 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 Note discussing trade secrets litigation for employers whose employees have misappropriated trade secrets. It describes pre-litigation investigation, sending cease and desist letters and contacting law enforcement. It also addresses filing a legal action, including choice of forum and choice of law, deciding whether to include the employee's new employer and third parties, common causes of action, discovery, injunctive relief, damages and attorneys' fees. It includes best practices for preparing to counter potential defenses and counterclaims and maintaining confidentiality during litigation.

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.

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).

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.

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).

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. 

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 Indiana. 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 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 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 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).

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 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 Kansas. 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 Connecticut. 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 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 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 state law on trade secrets and confidentiality for private employers in New Hampshire. 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 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 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 Mississippi. 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 Arizona. 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 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).

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.

A Q&A guide to state law on trade secrets and confidentiality for private employers in Virginia. 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 non-compete agreements between employers and employees for private employers in Nebraska. 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 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).

In U.S. Auto Parts Network, Inc. v. Parts Geek, LLC, the US Court of Appeals for the Ninth Circuit joined other circuits in adopting the Restatement (Second) of Agency's three-prong test for determining whether a copyrightable work is created by an employee within the scope of employment, and therefore a work made for hire owned by the employer.

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).

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.

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).

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.

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 the Illinois Appellate Court's recent decision in InsureOne Independent Insurance Agency LLC v. Hallberg, reiterating that only a party's material breach of a contract that contains a restrictive covenant excuses the other party from the restriction. James Hallberg hired 29 of his former employer's employees and directly competed with the former employer, breaching the restrictive covenants in his employment agreement with the employer. The court found that although the employer may have breached the employment agreement as well, a partial breach by one party did not justify the other party's failure to perform.

A Q&A guide to non-compete agreements between employers and employees for private employers in Louisiana. 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 Florida. 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 Idaho. 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 Massachusetts. 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 Ohio. 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 Law Firm Publication by Epstein Becker & Green, P.C. discusses Acordia of Ohio, L.L.C. v. Fishel, in which the Ohio Supreme Court held that when a company that was the original party to a non-compete merges into another company, unless the non-compete contained a “successors and assigns” clause, the merger is a termination of employment which triggers the running of the non-compete's restrictive period. The court noted that the surviving company could have protected its business interests by requiring employees to sign new non-competes as a condition of their continued at-will employment. The ruling also implied that if the non-compete had included the type of “successors and assigns” language commonly found in non-competes, the outcome may have been different. On October 11, 2012, the Ohio Supreme Court issued a new decision in this case on reconsideration holding that the employer "has the right to enforce the employees' noncompete agreements as if it had stepped into the shoes of the original contracting companies."

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 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 Missouri. 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 Alabama. 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 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).

This Article discusses post-termination non-competition provisions in executive employment agreements. It includes an analysis of the law in California, Florida, Illinois, New York and Texas on the reasonableness of duration and geographic scope restrictions, as well as examples of recent executive employment agreements with links to each underlying agreement. This Article also includes an expert Q&A with Katherine E. Perrelli of Seyfarth Shaw LLP, discussing considerations for employers with an online presence and the use of other types of restrictive covenants.

A Q&A guide to non-compete agreements between employers and employees for private employers in Oregon. 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 South 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).

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 Ogletree, Deakins, Nash, Smoak & Stewart, P.C. discusses the Massachusetts Superior Court decision in Grace Hunt IT Solutions, LLC v. SIS Software holding that a change in compensation is a material change requiring the execution of new non-compete agreements. In Grace Hunt IT Solutions, a successor company asked its new employees to sign new restrictive covenants and offered a new bonus structure. The employees refused to sign the restrictive covenants and left for a competitor software company. The court found it "extremely significant" that the successor offered new agreements, signaling that the old agreements were being replaced by a new arrangement. Furthermore, the court found that the change in compensation was a material change that would void the previous non-compete agreement.

In Aqua Connect, Inc. v. Code Rebel LLC, the US District Court for the Central District of California dismissed a remote-access software company's claim that one of its customers violated the California Trade Secrets Act (CTSA) when it downloaded and reverse engineered a trial version of the company's software. The court emphasized that CTSA's definition of "improper means" trade secret misappropriation specifically states that reverse engineering alone is not an improper means of acquiring trade secret information. The court rejected the software company's argument that the prohibition on reverse engineering in its End User License Agreement (EULA) made the activity an improper means of obtaining the trade secret information. The court also rejected the software company's argument that its EULA created a duty for its customers to maintain the secrecy of company trade secrets.

This Fisher & Phillips LLP memorandum discusses Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C. In this decision, the Montana Supreme Court held that an employer that ended an employment relationship without cause lacked a legitimate business interest in preventing a former employee from competing. This decision marks the first time the Montana Supreme Court has expressly addressed the requirement that an employer demonstrate a legitimate business interest in enforcing a non-compete.

This Ogletree, Deakins, Nash, Smoak & Stewart, P.C. memorandum discusses the Virginia Supreme Court's opinion in Home Paramount Pest Control Companies, Inc. v. Shaffer. In this decision, the Virginia Supreme Court held that a non-compete clause in an employment agreement was overbroad and unenforceable because it prohibited the employee from working for a competitor "in any manner whatsoever." This decision reverses long-standing precedent, under which the Virginia Supreme Court previously held that identical language was enforceable.

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  

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.