Umm, this infoclip is really just an introduction to an introduction of non-compete agreements. The brevity of the introduction means that you can probably find exceptions to some of my general statements. When dealing with covenants not to compete, details matter.
But by way of review,under South Carolina law and the law of most states, non-competes which are a general restraint of trade are against public policy and void, while those founded upon valid consideration and reasonable in their scope and operation are valid. For more, read this more detailed introduction to non-compete law (using South Carolina law).
Several posts on this blog have focused on the inevitable disclosure doctrine, which seeks to further erode an employee’s power to quitand work elsewhere. Nucor v. Bell has produced two published decisions related to a trade secret battle waged against a former employee, who was not quite blameless. However, I have come across an unreported decision from that case (2008) in which U.S. District Court Judge David Norton found that South Carolina would adopt the inevitable disclosure doctrine. Judge Norton used the inevitable disclosure doctrine to grant injunctive relief against the former employee. This case deserves our attention.
Okay. I confess: I have been really busy (what a blessing) and have not had a chance to write much. But, I have had a chance to read, and I came across something else I wanted to share. Management-side employment lawyer, Jay Shepherd, has written a good article directed at employees: Eight Ways to Guarantee Yourself a Non-Compete Lawsuit.Pretty good advice. Because, in the end, beating your non-compete begins with not acting stupidly and dishonestly, and even if you have a non-compete that will never hold-up in court, being dishonest before you leave your job or taking stuff with you when you leave will make your non-compete the least of your problems. Remember you can delete, but you cannot hide.
A quick follow-up on the last post (Inevitable Disclosure: Bimbo Sues Muffin Man): “In his 37-page opinion in Bimbo Bakeries USA Inc. v. Botticella, U.S. District Judge R. Barclay Surrick granted a preliminary injunction, ruling that Chris Botticella, a former senior vice president at Bimbo, cannot start to work for Hostess Inc. because his extensive knowledge of Bimbo’s trade secrets makes it substantially likely, if not inevitable, that he would disclose Bimbo’s secrets to Hostess.” Read the rest onLaw.com.
Here’s an articleabout an inevitable disclosure case recently filed in federal court in Pennsylvania. Bimbo Bakeries sued a former manager at one of its english muffins facilities, saying “he is one of fewer than 10 people in the world who know how to make the muffins with the special ‘nooks and crannies.’” To prevent disclosure of its trade secrets, Bimbo asked a judge to keep the former manager from working for a competitor. Although, he had not even signed a noncompete. Read the rest of the article on Law.com.
American businesses have fought long and hard to preserve employment-at-will as the bedrock of employment law in this country. Employment at will represents the power of either party to end the relationship at any time and for any reason. Theoretically, the power to quit at will should at least preserve some employee bargaining power because an employer knows that if it does not treat employees fairly, honestly, with dignity and respect, they can walk. Imagine how unfair and potentially abusive it would be if an employer has the right to fire an employee at will but the employee did not have the reciprocal right to quit at will. Well, that is the direction in which the common law is evolving. [click to continue…]
In Southwest Stainless, the U.S. Court of Appeals for the Tenth Circuit held that although pricing generally may be protectable, a court needs look at the specific pricing at issue in the case to determine whether the company protected that pricing. Ultimately, the Court in Southwest Stainless held that sharing pricing with a customer, without restriction, removes any claim of confidentiality that may have existed.
Conceptually, there is something disturbing about creating a rule out of thin air that an employer loading its information onto my hard drive means that the employer owns my hard drive. Why not the other way around? And of course, the hard drive in this case is really someone’s brain. The inevitable disclosure meme has not reached pandemic levels just yet but it threatens to take your brain from you. (See previous post for introduction.) However, to understand how the common law has evolved to the point that it is a question as to who owns your brain, it is important to understand the environment in which inevitable disclosure first appeared. The first case to rely on the inevitable disclosure doctrine was PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir.1995), which is discussed below. [click to continue…]
The history of non-competes reveals a long standing hostility to agreements that prohibit competition and freedom, which for hundreds of years resulted in zero-tolerance for non-compete agreements. When the common law finally evolved to permit limited enforcement of restrictive covenants, it is not surprising that a competing freedom, the “freedom of contract,” was the justification. Sometimes coined “liberty of contract”, this principle recognizes the freedom of people to enter into agreements with others and to have those agreements enforced.
A basic tenet of contract law is that a person seeking to enforce the contract must have fully performed his obligations under the contract. Stated simply, you can’t complain about someone else’s breaches if you have breached the contract. As many courts have been fond of saying, “one who seeks equity must do equity.” And, in many non-compete cases, the issue arises as to whether the employer has fulfilled all of its contractual obligations under an employment agreement, and if not, the employee can use this “unclean hands” defense in an action to enforce a non-compete agreement. [click to continue…]
American businesses have fought long and hard to preserve employment-at-will as the bedrock of employment law in this country. Employment at will represents the power of either party to end the relationship at any time and for any reason. Theoretically, the power to quit at will should at least preserve some employee bargaining power because an employer knows that if it does not treat employees fairly, honestly, with dignity and respect, they can walk. Imagine how unfair and potentially abusive it would be if an employer has the right to fire an employee at will but the employee did not have the reciprocal right to quit at will. Well, that is the direction in which the common law is evolving. 
Conceptually, there is something disturbing about creating a rule out of thin air that an employer loading its information onto my hard drive means that the employer owns my hard drive. Why not the other way around? And of course, the hard drive in this case is really someone’s brain. The inevitable disclosure 
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