Source: https://www.faircompetitionlaw.com/2011/12/26/trade-secret-noncompete-issues-and-cases-in-the-news-december-2011/
Timestamp: 2019-04-24 22:02:41+00:00

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California (as interpreted by an Idaho court): The Idaho Supreme Court issued a decision on November 30, 2011 (T.J.T., Inc. v. Mori) that, under California law, a seller of a business who, upon the sale, becomes an employee of the acquiring company can be bound by a noncompete agreement that he entered into as part of the sale of a business.
Delaware: The District of Delaware issued a recent decision (actually, a report and recommendation subject to review by the district court judge) analyzing the standards (under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009)) required to plead a trade secrets claim under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001-2009.
Georgia: Coca-Cola put its secret formula “on display.” Don’t get too excited, the formula held up as one of the most famous trade secrets in the world (whether the legendary security measures are true or not) is not really on view. See here.
Massachusetts: Faithless employee? The Massachusetts Appeals Court, in Specialized Technology Resources, Inc. v. JPS Elastomerics Corp, barred a former employee and his new employer not only from using the stolen trade secrets until such time as they are no longer trade secrets (if that should ever happen), but – for five years – from producing a similar product by any means.
Michigan: No noncompete? No problem. If your employee steals trade secrets, you may still have a remedy. The Michigan Court of Appeals, in Actuator Specialties, Inc. v. Chinavare, is the latest to grant a “head start” injunction against a faithless former employee who stole trade secrets. In Actuator Specialties, the court barred the employee from working for a competitor for three years, seemingly recognizing that that small companies may not take all the steps one would expect of more sophisticated companies (such as requiring employees to agree to relevant restrictive covenants). Another interesting aspect of the case is that the defendant employee took steps that would be barred by the requested injunction in the period between the time that the injunction was sought and when it was issued. This is an issue that comes up often, and the Michigan Court of Appeals was clearly displeased with the employee’s conduct during that window.
Montana: The Montana Supreme Court, in Wrigg v. Junkermier, held that there is no legitimate business interest (a necessary element to enforcement of noncompetes in most states) in enforcing a noncompete against a former employee who was terminated by the company without cause.
Virginia: Virginia’s genera cap on punitive damages ($350,000) applies to the entire trade secret case – not to each trade secret. E.I. DuPont De Numours & Co. v. Kolon Indus., Inc., 2011 WL 5872895 (Nov. 22, 2011).
International: Theft by foreign nationals continues. See Scientist gets 7-plus years for trade secret theft. But as I recently observed to reporter Jan Wolfe (reported in Don’t Blame China for Trade Secrets Left (on Law.com)), international trade secret theft is a much smaller problem than domestic misappropriation.
Related Items of Interest: A few obscure issues are worth a look. In particular, (1) whether a signature is required for a noncompete to be enforceable (remember the analogous case out of New York a few years ago (IBM v. Johnson), where the employee escaped the agreement because he signed in the wrong place); and (2) what happens when there is a dispute about a “missing” noncompete (I represented an employee in one of these relatively-rare cases this past year, and the validity of the purported noncompete was never resolved). Ken Vanko wrote a nice summary of the key considerations for both of these issues: Are Signatures Required on a Non-Compete Agreement? (U.S. Risk Mgmt. v. Day); and Stealing a Non-Compete Agreement May Not Do You Any Good and It Could Land You In Jail.

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