Trade Secrets, Noncompete and Restrictive Covenant Agreements

Trade Secrets, Noncompete and Restrictive Covenant Agreements

Overview

In an employment marketplace where it is not unusual for employees to leave one company and jump ship to a competitor, the protection of valuable trade secrets and confidential business information has become an increasing concern for employers. In today’s business world, companies can no longer protect their trade secrets simply by filing away a signed noncompete or nondisclosure agreement for each key employee or vendor. Critical strategic information can be accessed, copied and transmitted in an instant. Legal counsel must stand ready to help your company anticipate these risks and respond with speed and decisiveness when breaches occur.

Battle Tested Experience Across the United States and Beyond

Our clients’ employment and commercial relationships are rarely confined to a single state, and neither are our noncompete and trade secrets capabilities. Knowing which state will provide the most favorable law and forum for a particular dispute requires the strategic judgment of a team with truly national trial experience. As national counsel to clients with operations across the United States, we bring unusually broad geographic experience to these disputes. And our capability does not stop at the U.S. border. We are highly experienced in obtaining evidence under international law and assisting our clients in cross-border discovery.

Meeting New Challenges With Innovative Solutions

Rapidly evolving technology and globalization are transforming business needs, and creative counsel must look beyond established law to meet new challenges. Our lawyers have a strong track record of pushing the envelope to achieve innovative litigation solutions.

A high-profile example is PepsiCo, Inc. v. Redmond and Quaker Oats Co., 54 F. 3d. 1262 (7th Cir. 1995), one of the most significant and frequently cited trade secrets decisions of the past 20 years. In Redmond, our lawyers invoked the “inevitable disclosure” doctrine to obtain an injunction prohibiting competition from a former executive — without a noncompete agreement.

In the following years, when e-discovery revolutionized trade secrets litigation, our attorneys were again pioneers. Team leaders won some of the first trade secrets decisions imposing case-ending sanctions for spoliating electronic data.  In response to the new challenges of cybersecurity and data privacy, we are once again at the forefront of developing strategies for trade secrets protection as integrated data protection solutions.

The same legal remedies that provide essential protections for owners of trade secrets and other confidential and proprietary information can also be used by plaintiffs to stifle legitimate competition. Defendants facing such litigation often turn to us for an aggressive defense against abusive litigation. We have deep and broad experience representing employers who engage in lawful and fair competition, yet face targeted litigation designed to undermine legitimate acquisition of talented employees.

Putting the Right Protections in Place

The best way to protect sensitive business information is to prevent breaches before they happen. Schiff Hardin’s employment attorneys often provide counseling and advice to companies who wish to protect their trade secrets and confidential business information, and we have drafted numerous confidentiality, non-compete, and non-solicitation agreements. Our team helps clients design and implement information protection programs to anticipate and avoid the security breaches that can necessitate litigation. We work closely with our firm’s Cybersecurity and Data Privacy team to maximize client preparedness. Having the right protections in place — appropriate and up-to-date policies, contracts, firewalls and incident response plans — provides a strong basis for litigation preparedness if and when resort to the courts becomes necessary.

  • Experience

    • We defended and prosecuted a multi-jurisdiction non-compete and restrictive covenant litigation on behalf of a food commodities broker and logistics company and its employees. The matters were litigated simultaneously in Ohio and South Carolina state courts after we sought a temporary restraining order to prevent the plaintiff from pursuing their claims in a foreign jurisdiction whose laws were less favorable to our clients’ position. After obtaining the TRO, we were able to negotiate a resolution that allowed our client’s employees to continue working in the capacity they were hired without disrupting our client’s business model and operations.
    • A competitor of our client filed a motion for temporary restraining order and complaint at law against our client and its former employee, now an employee of our client, in Georgia state court alleging violations of its former employee’s noncompete agreement. The motion sought to prevent our client’s new employee from, among other things, working in the senior-level sales capacity in which he was hired, servicing customers within a large geographic area, and attending an upcoming industry event. Our attorneys appeared at the TRO on behalf of our client and its employee within hours of receiving the Notice of TRO, achieving a result that permitted our client’s employee to continue working with no material changes to his role. Soon thereafter, we were able to help our clients resolve the matter in full with an agreement that permitted the employee to continue working with no material changes to the role for which he was hired, and that had no monetary component.
    • Our attorneys successfully represented our client against multiple EEOC charges by two former employees while at the same time challenging those former employees’ use of its confidential information, compliance with their employment agreements, and use of its intellectual property. We obtained dismissals on both EEOC charges while also securing material assurances and compliance with respect to the former employees’ use of confidential information.
    • Schiff Hardin attorneys drafted trade secret, noncompete and restrictive covenance agreements for a large employee seeking to engage the services of a CEO.
    • We revised a proposed restrictive covenant agreement and suggested changes to withstand a legal challenge and protect enforceability.
    • Our attorneys represented a physician’s group in trade secret, restrictive covenant and non-compete litigation.
    • While representing a tech company, we managed the process of a trade secret agreement from drafting through execution.