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Misappropriation of trade secrets is a proper basis for a court to order a temporary injunction; however the language in the injunction must be limited to prevent it from becoming blanket prohibition on competition. In Reliant Hosp. Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc., 374 S.W.3d 488 (Tex. App.—Dallas 2012, pet. filed), Cornerstone Healthcare Group (“Cornerstone”) brought suit...
Continue ReadingA decision from the Arizona Court of Appeals illustrates precisely why employers must exercise care when choosing to classify particular company information as trade secrets. Reversing the lower court’s grant of a counterclaim for misappropriation of trade secrets, the court in Calisi v. Unified Financial Services, 2013 WL 1490465 (Az.Ct. App. 2013) determined that the employer failed to demonstrate...
Continue ReadingWhile an employer may draft an enforceable non-compete covenant, it does not automatically follow that courts will enforce it with injunctive relief. Such was the case in Welsco, Inc. v. Brace, 2012 WL 4087224 (E.D. Ark. 2012). There, although the employment agreement was considered reasonable in both scope and duration, the...
Continue ReadingGeorgia employers cannot bring an independent claim for violation of the Georgia Trade Secrets Act based on the inevitable disclosure doctrine in the context of non-compete litigation. This was the conclusion of the Georgia Supreme Court in Holton v. Physican Oncology Servs., LP, 2013 WL 1859294 (Ga. 2013). The Court, in explaining its decision, noted the generally unsettled nature...
Continue ReadingA recent decision from the Sixth Circuit upholding a district court’s preliminary injunction in litigation involving a non-compete clause demonstrates why an employee should sometimes be wary of legal advice from a new employer. In Firstenergy Solutions Corp. v. Flerick, 2013 WL 1500452 (6th Cir. 2013), Paul Flerick (“Flerick”) was employed as a salesman in the electric energy and...
Continue ReadingA preliminary injunction granted by the United States District Court for the Southern District of New York enforcing restrictive covenants against a former executive illustrates how narrowly tailored employment agreements are effective because of the willingness of courts to find them reasonable. In DeWitt Stern Group, Inc. v. Eisenberg, 2013 WL 2420835 (S.D.N.Y...
Continue ReadingIn the oil and gas industry, certain well construction costs are known as “complex services.” Traditionally, oil and gas companies have used paper records to track and pay costs. Company A developed software that allowed oil companies to plan, procure and pay for complex services online. Company A entered into an agreement with a software company, Company B, to...
Continue ReadingAs an opinion by the El Paso Court of Appeals demonstrates, even apart from a written contract, certain employees owe a fiduciary duty to their employers. In that case, a number of employees worked for home health care agency A, which provided home health care, hospice care and primary care to its patients. During their employment, the employees had...
Continue ReadingAn opinion by the Dallas Court of Appeals shows how the courts apply the Texas Noncompete statute to covenants involving physicians. In the opinion, a surgery center was registered as a limited partnership. The general partner was a corporation, and the limited partners were physicians. The partnership agreement prohibited the limited partners from owning an interest in a competing...
Continue ReadingAn opinion by the San Antonio Court of Appeals demonstrates that in order to prevail on a claim for tortious interference of contract, the claimant need not prove an outright threat. Certain statements and requests may be sufficient. A salesman was recruited to work for a company by a general manager and a sales manager. Later that year,...
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