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Category Archives: Unfair Competition

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Two Things You Can Do To Reduce the Likelihood That Your Company Will Be Found Liable For Conspiring Or Aiding And Abetting In An Employee’s Breach of Duty To A Former Employer

Posted in Breach of Fiduciary Duty/Duty of Loyalty, Covenants Not to Compete in California, Covenants Not to Compete in Other Jurisdictions, Employee Raids, Hiring a Competitor’s Employees, Other Restrictive Covenants, Protecting Trade Secrets and Other Business Information, Unfair Competition

When companies sue their former employees for theft they often claim that the former employee’s new employer has conspired with the former employee to misappropriate trade secrets, or that that new employer has aided and abetted the former employee’s breach of duty he/she owed to his/her former employer. Like Woodward and Bernstein, liability “follows the… Continue Reading

Senate and House of Representatives Pass the Defend Trade Secrets Act

Posted in Covenants Not to Compete in California, Covenants Not to Compete in Other Jurisdictions, Employee Raids, Hiring a Competitor’s Employees, New Legislation, Other Restrictive Covenants, Protecting Trade Secrets and Other Business Information, Unfair Competition

Senate and House of Representatives Pass the Defend Trade Secrets Act (DTSA).  First federal trade secret bill awaiting presidential signature.  More details can be found at the following Forbes article:  “The New Defend Trade Secrets Act is the Biggest IP Development in Years,” dated April 28, 2016.

California Court Confirms No Absolute Public Policy Against Non-Competes Entered into by Partners

Posted in Covenants Not to Compete in California, Other Restrictive Covenants, Protecting Trade Secrets and Other Business Information, Unfair Competition

California’s prohibition on non-competition agreements is less than absolute.  For example, non-compete agreements may be enforced against partners or sellers of businesses.  Additionally, in SingerLewak LLP v. Andrew Gantman (2015) 241 Cal.App.4th 610, a California Appellate Court affirmed an arbitration award that would be considered by most to be a misapplication of California’s non-competition law…. Continue Reading

Are “No Rehire” Provisions in Settlement Agreements at Risk?

Posted in Breach of Fiduciary Duty/Duty of Loyalty, Covenants Not to Compete in California, Covenants Not to Compete in Other Jurisdictions, Hiring a Competitor’s Employees, Protecting Trade Secrets and Other Business Information, Unfair Competition

The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was… Continue Reading

Tech Companies Reach New Settlement in Anti-Poaching Cases

Posted in Covenants Not to Compete in California, Hiring a Competitor’s Employees, Other Restrictive Covenants, Protecting Trade Secrets and Other Business Information, Unfair Competition

This blog has previously reported on the anti-poaching cases involving various tech companies in Silicon Valley.  The cases arise out of alleged agreements between various tech companies not to recruit each other’s employees.  The U.S. Department of Justice brought antitrust actions as a result of these alleged agreements which resulted in the companies entering into… Continue Reading

“No-Poaching” Lawsuits Come to Hollywood

Posted in Covenants Not to Compete in California, Hiring a Competitor’s Employees, Protecting Trade Secrets and Other Business Information, Unfair Competition

Readers of this blog are familiar with our coverage of the various cases involving high tech firms in Silicon Valley such as Google and Adobe involving alleged “no poaching” agreements that they would not solicit each other’s employees for possible employment.  Both the U.S. Government and plaintiff class action attorneys have alleged that such conduct… Continue Reading

California Businessman Sentenced to 15 Years for Trade Secret Theft

Posted in Protecting Trade Secrets and Other Business Information, Unfair Competition

A California businessman, Walter Liew, was recently sentenced to 15 years in federal prison after being found guilty by a jury on charges of trade secret theft, economic espionage, witness tampering and making false statements.  Mr. Liew, who had contracts with a Chinese company Pangang Group, was charged with stealing trade secrets from DuPont that… Continue Reading

Non-Competes and the “Trade Secret Exception” Revisited

Posted in Covenants Not to Compete in California, Covenants Not to Compete in Other Jurisdictions, Hiring a Competitor’s Employees, Unfair Competition

We periodically discuss California law regarding non-compete provisions in this Blog. The California Supreme Court has made clear that non-compete provisions are unenforceable unless they fall within one of the statutory exceptions set out in sections 16601 et seq. (i.e., in connection with the sale of a business, goodwill, etc.).  Over the years, courts have… Continue Reading

The Truth About the “Exceptional” Remedy

Posted in Injunctions, Protecting Trade Secrets and Other Business Information, Unfair Competition

It is a truism that preliminary injunctions are “rare” and “exceptional” remedies.  But rarity is context specific.  As a percentage of cars made, Cobra GTs are rare.  If you are standing in the plant where they are made, however, they are anything but rare.  So, while it may well be true that preliminary injunctions, as… Continue Reading

Downloading is Not Necessarily Misappropriating

Posted in Computer "Crimes", Protecting Trade Secrets and Other Business Information, Unfair Competition

One of the key pieces of evidence a plaintiff in a trade secret case usually looks for is the downloading of company information from its computers prior to a former employee departing and joining a competitor.  Generally, this “smoking gun” type of evidence shows that the employee on his or her last day accesses and… Continue Reading

Trade Secret Theft Gets One Year in Prison

Posted in Protecting Trade Secrets and Other Business Information, Unfair Competition

An employee of a Bay Areas executive recruiting firm who left to start his own firm was sentenced to one year in prison after being found guilty of trade secret theft and unauthorized computer access crimes.  David Nosal was a former managing director at Korn/Ferry International and left in 2004 to start his own firm. … Continue Reading

Covenants Not To Compete: Restraining a Seller/Employee Against Competition – Not As Easy As it Looks

Posted in Covenants Not to Compete in California, Protecting Trade Secrets and Other Business Information, Uncategorized, Unfair Competition

Section 16601 of the California Business and Professions Code provides a well-known exception to California’s statutory refusal to enforce contractual commitments not to compete.  Under that section, Courts will enforce “reasonable” restrictions on the seller of a business to engage in competition against the buyer of that business.  This is a commonsense approach: a buyer… Continue Reading

Trade Secret Defendants Beware: The Danger of Stipulated Injunctions

Posted in Covenants Not to Compete in California, Hiring a Competitor’s Employees, Injunctions, Protecting Trade Secrets and Other Business Information, Uncategorized, Unfair Competition

The Cruel Lessons of Wanke, Industrial, Commercial, Residential, Inc. v. Keck  (2012) 209 Cal.App.4th 1151 By:      Charles L. Post Defendants in trade secret and unfair competition cases often have fewer resources than the plaintiff companies that bring them.  This is often the case in “classic” trade secret misappropriation scenarios: former employees form a new company… Continue Reading

Employers: Act Fast or Weaken Your Trade Secret Case

Posted in Hiring a Competitor’s Employees, Protecting Trade Secrets and Other Business Information, Unfair Competition

When one or more of your key employees leaves to join a competitor and begins soliciting your customers, one of your strongest weapons under California’s trade secret laws is the ability to obtain an immediate temporary restraining order to stop your former employee and his or new employer from unlawfully competing against you.  Many trade… Continue Reading

Trade Secret Preemption Revisited

Posted in Employee Raids, Hiring a Competitor’s Employees, Protecting Trade Secrets and Other Business Information, Unfair Competition

This blog has periodically visited the issue of preemption in trade secret cases.  Preemption arises when a plaintiff alleges common law causes of action (such as conversion or interference with economic relations) with a trade secret misappropriation claim that is based on the “same nucleus of facts.”  California courts have repeatedly held that California’s Uniform… Continue Reading

A Reminder to Employers of the Need for Social Media Policies

Posted in Protecting Trade Secrets and Other Business Information, Unfair Competition

Those of you who attended our seminar on protecting confidential and trade secret information last Spring may recall our discussion about a trade secret misappropriation case involving a Twitter account. In that case, PhoneDog v. Kravitz, 2011 U.S. Dist. LEXIS 129229 (N.D. Cal. 2011), a product news and review company, PhoneDog, claimed it issued Twitter… Continue Reading

Another Door Closes on Non-Compete Agreements

Posted in Covenants Not to Compete in California, Unfair Competition

Readers of this blog will note that we frequently remind them that California law generally prohibits non-compete agreements.  There are very limited exceptions to this general rule, one being that the seller of goodwill in a business can be bound by a valid non-compete agreement to protect the goodwill that is being purchased.  Sometimes, the… Continue Reading

Surrender is Futile – Court of Appeal Affirms “Bad Faith” Attorney’s Fees Award in Trade Secrets Case

Posted in Protecting Trade Secrets and Other Business Information, Unfair Competition

There are good, legitimate reasons for filing a trade secret and unfair competition case.  The protection of trade secrets and proprietary information and protection against unfair conduct by competitors are just a few.   There are also business reasons for bringing such a claim, including burdening a competitor or a startup competitor with the cost of… Continue Reading

California Uniform Trade Secrets Act Preemption: Golden Bullet or Much Ado About Nothing

Posted in Protecting Trade Secrets and Other Business Information, Unfair Competition

 It is common for plaintiffs in employee-related trade secrets and unfair competition cases to allege something of a grab bag of statutory and common law theories.  Often, claims of misappropriation of trade secrets, intentional interference with economic advantage, breach of duty, and common law unfair competition will be based on the same set of facts… Continue Reading