Archive for the ‘Non-Compete Agreements’ Category
In many instances these days, employees are forced under threat of termination, to sign non-compete agreements. In many cases, even if signed, they may never be enforceable if the employee elected to go to another company. Make sure and have an employment law attorney check out your non-compete and advise you on your rights since non-compete laws vary greatly from state to state.
In the event, though, that you are a high-level employee, which access to confidential information, your former employer will probably seek to enforce the non-compete agreement. As is the case with Martin Collins and Ford Motor Company.
Ford Motor Co. is suing Martin E. Collins, a former executive it says is violating a non-compete agreement. Ford hired Collins as general sales manager for Ford and Lincoln in March; he began work May 2 at Ford’s world headquarters in Dearborn. Collins managed the entire dealer distribution network for Ford and Lincoln, and provided “ongoing feedback to senior Ford management regarding sales performance, sales trends and progress toward program and budget goals,” according to the lawsuit filed Thursday in Wayne Circuit Court and since moved to U.S. District Court in Detroit.
Ford claims Collins agreed to a confidential information/non-compete agreement prohibiting him from working for a competitor for two years. Collins told Ford he had acquired no confidential information during his tenure at the company.
If you are given a non-compete to sign or have questions about one after resignation or termination, feel free to contact Scott M. Behren and the Behren Law Firm for a free consultation.
We have blogged on many occasions on beating your non-compete agreement. The enforceability of them varies from state to state and can be dependent upon what state you worked in and what state your employer was located in.
Boston Beer Corp., the brewer of Sam Adams beer, recently sued a former sales executive and a rival California brewer, of Anchor Steam, he went to work with to try to keep him from divulging any of its trade secrets.
This case is interesting since in California, non-competes are generally not enforceable. However, Boston Beer sued Judd Hausner and Anchor Brewing of San Francisco in Boston a state that allows non-compete clauses in employee contracts.
In its lawsuit, Boston Beer seeks to enforce its non-compete against Mr. Hausner for one year. Boston Beer claims that Hausner hold confidential trade secrets.
This confidential information included Boston Beer’s secret plan for introducing new products in 2012, as well as sales and pricing numbers for the customers served by the entire Western Division of the Company (extending through the western states of the United States and into Canada). These secret plans and confidential data were disclosed to Hausner to enable him to compete more effectively against direct competitors such as Anchor.
Will keep you posted on how this beery interesting case turns out.
If you want to draft, review, negotiate or litigate over a non-compete, feel free to call Scott Behren and the Behren Law Firm for a free consultation.
Your average employee has to deal with non-competes, but based upon a pending Palm Beach County lawsuit so do members of the clergy. Ask Bruce Benson a former cantor of Temple Beth Am in Jupiter, Florida.
Cantor Benson’s former employer is seeking to keep him from holding High Holiday services at Jupiter High School. Temple officials will ask Circuit Judge Robin Rosenberg to stop Benson from holding Rosh Hashanah and Yom Kippur services at Jupiter High School. Allowing him to draw people away from the temple will cause the synagogue “irreparable harm [which could cause it to be] completely destroyed,” it claims in a lawsuit.
“It’s the most important time of the year for a Reform Jewish organization,” said Brian LaBovick, a vice president of the synagogue whose law firm is representing the temple. Not only do fees charged to attend Rosh Hashanah and Yom Kippur services generate a “significant amount of working capital,” but it is a way to turn nonmembers into members told the Sun-Sentinel newspaper.
The Temple claims that the Cantor’s plans to hold services in the local school violates his non-compete with his former employer, who terminated his contract with them. Benson claims he is not trying to compete but formed the Institute for Jewish Living to promote the jewish faith to persons who don’t belong to temples.
The Temple claims that Benson is competing with them in that he is charging for High Holiday services one half what his former Temple is charging for these same services.
Frankly, I am surprised that the Court will even get involved in this issue since it seems to violate the Establishment Clause of the U.S. Constitution. I can guarantee you that if the cantor tried to sue the Temple about his termination they would have claimed the court can’t get involved based upon the Establishment Clause. So why with the roles reversed, do they get now to involve the courts?
Will keep you posted on what happens. If you need advise on drafting, interpretation or litigating a non-compete agreement, feel free to call Scott Behren and the Behren Law Firm.
On many occasions I have blogged on this site about non-compete agreements and their enforceability. In summary, the enforceability of these agreements is based upon the language in your respective agreement and the state’s law that applies. When you have a non-compete you want to be aware of your rights under the agreement before you violate its terms to avoid a situation where your former employer seeks an injunction to prevent you from working for the new company. Case in point, former Wal-Mart executive Hank Mullany.
CVS Caremark Corp named a recent Wal-Mart Stores Inc executive as the president of its retail pharmacy business, but a judge temporarily blocked him from taking the job due to a noncompete agreement with Wal-Mart.
Read the rest of this entry »
One of the areas that I have frequently blogged about is the use and enforceability of non-compete agreements between employers and employees. It should be noted that the enforceability of these agreements varies widely depending upon the state in which the employee is located, the employer is located and the actual language used in the agreements.
Todays blog posting stems from a lawsuit filed by Zambelli Fireworks International against one of its rival fireworks companies Pyrotecnico. The dispute stemmed from coveted choreographer Matthew Wood, who quit Zambelli Fireworks Internationale in 2008 to work for Pyrotecnico. Zambelli sued, claiming Wood violated a non-compete clause in his contract.
The lawsuit stated Zambelli hired Wood in 2001, and that he was one of Zambelli’s most creative pyrotechnicians and choreographers. Shows he conducted included a New Year’s Eve celebration in Times Square and college football’s Orange Bowl in Miami.
U.S. District Judge Terrence F. McVerry on Tuesday sided with Wood and dismissed the case. Although four customers left Zambelli for Pyrotecnico — including the Florida Marlins and the Hard Rock Cafe — after Wood left Zambelli, the judge ruled that was not enough evidence to prove Wood violated his contract.
“Zambelli has failed to introduce sufficient admissible evidence to enable a reasonable factfinder to determine that its loss of business was due to wrongful conduct by Wood, as opposed to the mere loss of his services or other competitive factors,” McVerry wrote.
This case shows the importance of the language you put in the non-compete agreements since many non-competes prevent the employee from going to a competitor at all for a period of several years. Apparently that was not the case with the Zambelli contract or they would not have had their claims dismissed. Perhaps, the Zambelli agreement only prevented Wood from soliciting customers upon his departure from Zambelli.
The moral of this ruling is that if you want advice on defending against a claim brought on a non-compete agreement, you need to consult with an employment lawyer who has experience in these types of agreements.
Behren Law Firm has significant experience in representing employees and employer in these types of disputes so feel free to check out our web site www.behrenlaw.com for a free consultation.
So on many occasions on this blog I have posted about under what circumstances a non-compete is valid under Florida non-compete law. So of interest to my reading public is a new case that just came out from a Florida Appeals Court holding that a non-compete agreement against one of an employer’s former tattoo artists was enforceable.
In this case, Morgan worked for Atomic Tattoos for about two years. At the time he was employed he signed a non-compete that said if he left the employ of Atomic that he could not compete against Atomic for 1 year within a 15 mile radius. Atomic argued to the Court that it trained Morgan how to be a tatoo artist and gave him access to its customer lists which they had compiled over years. When Morgan was terminated in 2009, he went 6 miles away and took Atomic’s customer lists and started to solicit and send e-mails to Atomic’s customers.
When the suit was filed, Atomic sought to enjoin Morgan from working within that 15 mile radius as set forth in their non-compete agreement. The trial court denied the injunction. On appeal, the appellate court ruled that the trial court should have granted the injunction and enforced the non-compete against Morgan.
I think this case does not really change my opinion about instances in Florida (that I have set forth in prior posts) where non-competes are not enforceable. In this case, the appeals court seemed to put emphasis on the training provided to Morgan and their customer lists which Morgan admitted to taking with him when he left. In addition, I think the court was more likely to enforce the non-compete given the very reasonable scope of the non-compete. They were only trying to keep him from working within 15 miles of their business. Morgan could have easily gone to work 16 miles away and not been bound by the terms of the non-compete. This was not the type of non-compete where the employer tried to keep the former employee from working in an entire state or county, just a relatively small geographic radius.
In light of this ruling, Morgan will probably have to pay damages and attorneys’ fees to his former employer’s attorneys, something he could have avoided had he not been so bold in his violation of his non-compete agreement.
So if you are fired or quit and are not sure about how to deal with your non-compete agreement, make sure you go to an employment lawyer to have it reviewed and give you some advice. I ahve attached a copy of the court decision to this post.
You may recall I have blogged on many occasions about the enforceability of non-compete agreements. In many cases, depending upon the state you are employed in, non-competes are not enforceable unless the employer has a legitimate business interest, such as a trade secret, that they are trying to protect by using the non-compete. You may recall that I previously had given examples of the KFC secret ingredient or the secret formula for Pepsi as the types of things that might be trade secrets that would justify protection under a non-compete agreement. It would not need to be something necessarily as famous as one of those examples, but it needs to be something more than information available from publicly available resources. In my experience, most employers do not have legitimate interests they are trying to protect by non-competes, they just want to stifle competition. That is not legal.
Well here is one more example of a legitimate trade secret where an employee was kept from working for a competitor due to his knowledge of trade secrets. Believe it or not, the owner of Thomas English Muffins a company called Bimbo Bakeries USA (Yes thats right Bimbo Bakeries) received a preliminary injunction against its former Vice President of Operations for California, Chris Botticella, preventing him from working for its competitor, Hostess Brands. The reason: Botticella was privy to nearly all of Bimbo’s trade secrets.
What’s a trade secret? Most states have codified the definition of a trade secret, but the basic ingredients are generally the same. A trade secret is defined as information, including a formula…method, technique or process that 1) derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use 2) is subject to efforts…to maintain secrecy. In a nutshell, a trade secret is information you don’t want a third party to know because it is profitable and, therefore, you try really hard to keep it confidential.
So Bimbo’s former employee went to work for a competitor, Hostess bakery. The maker of those so delicious Twinkies and cupcakes. The trial court granted a temporary injunction against this former employee keeping him from working for Hostess and finding that he had access to Bimbo’s trade secrets including: processes, pricing strategies and those formulas used to give Thomas English Muffins those nooks and crannies. The trial judge also found that Bimbo’s former employee, right after he accepted employment with Hostess, downloaded confidential information onto thumb drives.
So Bimbo’s former employee is prevented from working now until further rulings from this Court on this issue.
Well now I can give as examples of trade secrets, Pepsi, KFC and Bimbo Bakeries. But again, if you have a non-compete issue, speak with an employment attorney to review the document and advise you of your rights.
Hope all of my readers had a great Fourth of July Holiday. And what is the Fourth of July holiday without the world famous Nathan’s hot dog eating championship. Yes this year’s winner Joey Chestnut ate a paltry 54 hot dogs and buns to win the competition. However, the six time champion, Kobayahsi, was banned from the event.
Apparently Kobayashi, refused to sign a non-compete agreement with Major League Eating (MLE) that would prevent him from competing in non MLE sanctioned events. So MLE refused to allow the six time champ to compete in this years competition and what did Kobayashi do? What every other employee in dispute over a non-compete agreement would do, went to the event, staged a protest and got arrested. Go Kobayashi.
No I would not recommend that you get into a dispute with your employer over a non-compete agreement that finds yourself in jail as a result. However, you should, as I’m sure Kobayashi did, have an employment law attorney review its terms and negotiate them, if at all possible, before signing them.
If you find yourself looking for employment and had previously signed a non-compete agreement, similarly, have an employment law attorney review it, it may very well be unenforceable.
I hope you all had a good Memorial Day Weekend.
So you may recall that I talked in several recent bloggings about some of the new and unique legal issues that are arising from social networking sites such as Facebook, Twitter and LinkedIn. As I have said on several occasions, you need to watch what you are doing in your social network outings. This new case is just one more example.
Some of you may be aware of LinkedIn which is in the nature of a Facebook for business networking. Well a new case that was filed in Federal Court in Minneapolis now brings into question whether networking online such as on LinkedIn is a violation of a non-compete agreement.
Brelyn Hammernik, a technical recruiter, was recently sued by her former company, Hanover, Md.-based IT staffing firm TEKsystems, after she sent messages to members of her LinkedIn network — members who also happened to be current employees of TEKsystems.
In a lawsuit filed in U.S. District Court in Minneapolis, the company contends that Hammernik’s communications violated a noncompete agreement that bars her from contacting former clients and co-workers. Hammernik left TEKsystems in November and went to work for Horizontal Integrations, an Edina, Minn.-based IT consulting firm that is also named in the lawsuit.
This lawsuit is the first of its type. So does this lawsuit now mean that once you leave your employer, if you have a non-compete or non-solicitation agreement you need to unfriend fellow employees on LinkedIn, Facebook etc.? And it will necessarily determine whether sending e-mails and messages on social networking sites is the type of solicitaiton that violates a non-compete agreement. I believe that if you are not actively soliciting business or trying to get them to come to work with you at your new employer, I think it will be hard for an employer to keep you from communicating with former co-workers via social networking. Whats next, the employer keeping you from socializing with former co-workers at parties or bars?
One possible problem with the employees conduct in this case is that she sent e-mails that could be considered blatant solicitations as follows:
“Tom — Hey! Let me know if you are still looking for opportunities! I would love to have you come visit my new office and hear about some of the stuff we are working on! Let me know your thoughts! Brelyn”
Will keep you posted on what happens with this new case. Let us know what you think about this new case.
In most cases, a non-compete agreement will refer to all of the confidential and valuable information that your employer has given to you while employed for them and that this is the reason why the non-compete is so important. On many occasions you will see this type of information referred to as “trade secrets” which is the legal term for all of the secret information that your employer trusted you with. But guess what? In most instances you were not really provided with trade secrets. A real trade secret would be something like Colonel Sanders secret recipe for Kentucky Fried Chicken or the formula for Coca-Cola. There are other lesser known examples of “trade secrets” with many employers though. So how do you know if trade secrets were really given to you? Well, first the information provided to you would not be information generally known in the industry. So if you have been in the industry for ten years and every other company does the same thing, well, that’s probably not a trade secret. Normally, there would be extra efforts taken to ensure its secrecy such as extra computer security. In addition, if it is derived from publicly available resources that is generally not a trade secret. For instance, if your employer has a customer list that is obtained from the internet or cold calling or the phone book, its probably not a trade secret. And in most cases, if the employer can’t show the secrets it is protecting with the non-compete, its probably not enforceable.