by Andy Arnold on January 15, 2010
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…]
by Andy Arnold on January 10, 2010
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.
That was then…. [click to continue…]
by Andy Arnold on December 21, 2009
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…]
by Andy Arnold on November 23, 2009
It has been a while since I posted. Will save the excuses, but thought I would take this opportunity to link to one of my favorite management oriented blogs: Gruntled Employees. Jay Shepherd provides interesting advice to employers looking to avoid workplace litigation. Shepherd’s Eight Ways to Lose a Non-Compete Case is solid advice to those seeking to enforce a non-compete, and likewise provides insight to those who want to wiggle free.
by Andy Arnold on September 19, 2009
Trying cases is what I think I do best. There are some lessons that I have learned along the way. Twitter helped be shrink them down to 140 characters or less. Here are my top 10:
1. Cases are won as much by facts forgotten as facts remembered.
2 If truth is in the middle, then so will be the verdict.
3. Juries tend to make humble lawyers proud and arrogant lawyers humble.
4. The billable hour, whether your own or another’s, will dictate the course & length of litigation more times than not.
5. If you don’t pay attention to the trivial aspects of your case, the jury just might. Know thy case.
6. Don’t ask, if you don’t already know.
7. Jurors want to know you believe in your case before they believe in it.
8. If you don’t like your client, the jury surely will not.
9. Moderation in all things, except your passion for your case.
10. Make your case a cause.
[From my blog Blogger at Law. These lessons are just as applicable to efforts to beat a non-compete.]
by Andy Arnold on September 1, 2009
On August 2oth, 2009, the South Carolina Court of Appeals issued an opinion in Milliken & Co. v. Morin. The case deals with two issues: (1) Whether Milliken was entitled to injunctive/equitable relief in addition to the award of damages by the jury. (Not sure why they weren’t allowed to elect an equitable remedy.) And, there is a Muckenfuss type issue: (2) Whether the provisions related to confidentiality, inventions and non-disclosure are tantamount to a non-compete, which must be limited in geographic scope and time. Nothing earth shattering in this case, but the next to last sentence in last paragraph of the opinion hints in the wrong direction. Will consider further and discuss next time.
by Andy Arnold on August 9, 2009
by Andy Arnold on June 29, 2009
I had a set back recently when a judge decided to “punt” instead of making the decisions he is paid to make. I represented an employee who had been fired and whose non-compete was making it difficult for him to get another job. The language of the non-compete appeared to be extremely broad. We asked the judge to read the non-compete and decide if he agreed with us. The law is clear: Whether or not such a non-compete is reasonably limited in its operation is a question of law. Stringer v. Herron, 424 S.E.2d 547 (S.C. Ct. App. 1992)(emphasis added); see also Bicycle Transit Authority, Inc. v. Bell, 314 N.C. 219, 333 S.E.2d 299 (N.C. 1985)(“The reasonableness of a restraining covenant is a matter of law for the court to decide.”). So, when the employer argued there were “questions of fact’ the obvious response what facts do you need to read the non-compete and decide whether it is reasonable limited. [click to continue…]
by Andy Arnold on June 12, 2009
Many non-compete agreements not only attempt to undermine competition for a company’s customers but also prevent competition for its employees. South Carolina courts have upheld covenants not to solicit employees by a former employee but only to the extent that such solicitations interfere with contractual relations. This rule makes much more sense than those applied to solicitation of customers.
[click to continue…]
by Andy Arnold on June 4, 2009
So, what happens when the state identified in a non-compete’s choice of law is different than the state in which the agreement will be enforced? In Stonhard v. Carolina Flooring Specialists, Inc. 366 S.C. 156, 621 S.E.2d 352 (2005) the court held that although a choice of law provision would permit a non-compete to be construed in accordance with another state’s law, if the non-compete was invalid under South Carolina law, it would not be enforced. “Terms in a non-compete agreement may be construed according to the law of another state. Standard Register Co. v. Kerrigan, 238 S.C. 54, 70-71, 119 S.E.2d 533, 541-42 (1961). But if the resulting agreement is invalid as a matter of law or contrary to public policy in South Carolina, our courts will not enforce the agreement.” [click to continue…]
A recurring issue for those seeking my advice is whether information known by a former employee is a “trade secret.”
