Employee Mobility and Restrictive Covenants - Page 2 of 16

Trade Secret Remedies After Motorola Solutions, Inc. v. Hytera Communications Corp. Ltd.

In Motorola, the Seventh Circuit provided useful direction on navigating complex remedies issues in trade secret cases. In light of this decision, the plaintiff in trade secret cases should consider preserving conflicting damages models through trial to allow for the recovery of the largest award. Likewise, a trade secret plaintiff should consider utilizing the burden-shifting approach to recover unjust enrichment sales. The trade secret plaintiff can also rely — at least in circumstances like those in Motorola — on unjust enrichment damages to calculate exemplary damages. In addition, the court can consider a defendant’s litigation conduct in deciding the scope of the injunctive relief ordered.

To view the full alert, visit the Faegre Drinker website.

Federal Court Decision Creates Greater Uncertainty as to Future of FTC Final Rule on Noncompete Clauses

In what some view to be a surprise development, the Eastern District of Pennsylvania issued a decision in ATS Tree Services v. FTC on July 23 affirming enforceability of the FTC’s Noncompete Rule, which designates most noncompete clauses as unenforceable after September 4, 2024. All eyes now turn to the Northern District of Texas, where the Ryan v. FTC court has promised a final decision on or before August 30. Most expect that the Ryan court’s final decision will continue to hold that the FTC did not have authority to issue the Final Rule, creating a split of authority.

To view the full alert, visit the Faegre Drinker website.

Seventh Circuit Confirms Extraterritorial Reach of the Defend Trade Secrets Act

Under Motorola v. Hytera, a trade secret plaintiff can recover damages in the United States even on infringing sales that occurred outside the United States. The Seventh Circuit in Motorola confirmed that the Defend Trade Secrets Act can reach all of a defendant’s worldwide sales caused by the misappropriation, so long as — in the words of 18 U.S.C. § 1837(2) — “an act in furtherance” of the misappropriation was committed in the United States. As a result of the expansive reach of the Defend Trade Secrets Act, even in cases where the trade secret theft occurs mostly outside the United States, trade secret owners should consider whether they are still able to recover damages for foreign infringing sales in a U.S. court under the statute.

To view the full alert, visit the Faegre Drinker website.

Another Minnesota Noncompete Ban: Restrictive Covenants in Service Contracts

Minnesota continues to expand its restrictions on noncompete agreements and similar restrictive covenants. Last year, the legislature banned noncompete agreements between an employer and an employee. Now, a new law that went into effect July 1, 2024, prohibits agreements between service-provider companies and their customers that would prevent customers from hiring employees of those service providers.

To view the full alert, visit the Faegre Drinker website.

Court Blocks FTC Rule Banning Employment Noncompete Agreements on a Limited Basis

The FTC’s Rule banning noncompete agreements against the plaintiffs in Ryan LLC v. Federal Trade Commission has been enjoined. The court’s order signals a tough road ahead for the FTC’s Rule on a nationwide scale, although a second order is due by the end of July in a separate case. Nevertheless, employers should be aware of increasing judicial scrutiny and legislative limitations of restrictive covenants.

To view the full alert, visit the Faegre Drinker website.

NLRB: Noncompete and Employee Nonsolicitation Agreements Violate Covered Employees’ Section 7 Rights Under NLRA

J.O. Mory, Inc. represents a continuation of the Board’s attack on noncompetition agreements and a notable expansion to now target nonsolicitation covenants. Employers should take particular care to review the language of nonsolicitation agreements with covered employees to ensure that they are not likely to be construed to chill employees’ — and former employees’ — engagement in protected activity.

To view the full alert, visit the Faegre Drinker website.