Non-Compete and Trade Secrets News for the week ended January 6, 2017
Commercial real estate broker Avison Young has sued three former brokers who joined Cushman & Wakefield. According to Crain's Chicago Business, the factual predicate for the complaint appears to be the downloading of firm confidential material before departure. The lawsuit is pending in the Circuit Court of Cook County, Illinois.
The law firm of Foley & Lardner was sued by its client, 1347 Property Insurance Holdings, Inc., for failing to secure non-compete agreements from key employees of a company that the client acquired. The Complaint, filed in the Eastern District of Wisconsin, alleges that the employees formed a rival and then solicited the acquired entity's most significant clients. 1347 Property seeks damages of over $1.5 million arising from business that it would have kept if the executives had been required to sign enforceable non-competes. The Complaint is available here.
Illinois' new non-compete law took effect on January 1. The Freedom to Work Act generally prohibits non-compete contracts for low-wage employees. Please review my prior blog post about the new law.
Jonathan Pollard, a non-compete and trade secrets lawyer in Florida, has posted an excellent YouTube video of what he calls Florida's "non-compete crisis." Pollard is a strong, principled voice in this field and has some excellent perspectives on Florida law. Recall that many states, including Illinois, view Florida law as so extreme to call it contrary to public policy. I wrote on this particular issue about 18 months ago.
Seyfarth Shaw's Trading Secrets blog discusses a petition for certiorari that asks the Supreme Court to rule on the International Trade Commission's authority to investigate and adjudicate acts of trade secret misappropriation that occur entirely overseas. The ITC's enforcement activity in this area is a relatively new phenomenon and springs largely from the 2011 Tian Rui case.
Fisher & Phillips reports on a new Colorado case, which concerned a protective order dispute and the potential ramifications for protecting trade secrets in litigation. It's a very interesting read, stemming from a case where the underlying claims have nothing to do with trade secrets.
Also outside the non-compete context, but certainly relevant to non-compete claims, is the Appellate Court of Illinois decision in Carlson v. Jerousek. Though a personal injury case, the dispute involved an appeal from a contempt citation for the plaintiff's refusal to turn over five personal computers for forensic imaging. The appellate court found that the trial court failed to conduct an appropriate balancing test that governed the need for forensic imaging, principally because the computers lacked any nexus to the dispute and because the plaintiff had no history of shirking discovery obligations. This could prove to be a very important foundational e-discovery case in Illinois for competition disputes.
This time of year, the blogosphere is crowded with year-end wrap-up posts. I went with four of them, so I have little room to complain about the fire-hose of information circulating around. I recommend checking out two of them.
The National Law Journal has Epstein Becker & Green's "Key Trade Secret and Non-Compete Developments in 2016."
Russell Beck's Fair Competition Law post contains a more comprehensive list of non-compete and trade secret developments, which goes beyond the year's most significant highlights that I discussed .