Trade Secrets and Restrictive Covenants

Is a non-compete agreement signed months after work begins enforceable?

June 1, 2011 | by Eric B. Meyer

I was reading a blog post from Jennifer L. Gokenbach at the Colorado Employer’s Law Blog, discussing how, as of yesterday, Colorado deems continuation of at-will employment to be sufficient consideration to support a non-competition agreement. In non-lawyer speak, that means that if an employee signs an agreement not-to-compete in Colorado after the employee starts working, on the condition that if the employee does not sign the agreement then the employee will be fired, the employer may later enforce that agreement.

That’s now the law in Colorado. Is that also the law in PA, NJ, and DE?

Delaware: Yes. Research & Trading Corp. v. Powell, 468 A.2d 1301, 1305 (Del.Ch.1983).

New Jersey: Yes. Hogan v. Bergen Brunswiq Corporation, 153 N.J.Super. 37, 378 A.2d 1164 (App.Div. 1977).

Pennsylvania: No. An agreement not to compete with a former employer must be supported by new consideration; i.e., a change in the conditions of employment (e.g., a raise, promotion, or other financial benefit). Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279, 280 (Pa. 1974).

Misclassifying an employee may void a non-compete agreement

April 19, 2011 | by Eric B. Meyer

In an unpublished opinion, the Third Circuit Court of Appeals denied a Pennsylvania company’s attempt to enjoin a former employee, who had entered into several restrictive covenants with the company, to compete directly against the company and solicit its customers.

What did this employer do wrong and how can you learn from its mistakes?

After the jump…

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4 ways employers can protect themselves when employees leave

January 19, 2011 | by Eric B. Meyer

This story that I wrote with my Dilworth Paxson LLP colleague, David Laigaie, the Chair of Dilworth’s Corporate Investigation/White Collar Group, recently appeared in The Legal Intelligencer. If you operate a business in Pennsylvania and you have trade secrets, employees with non-solicitation agreements, or non-competition agreements, then take a few minutes and read this article. You’ll be glad you did.

Can employees use your confidential documents to prove discrimination?

December 13, 2010 | by Eric B. Meyer

If you are reading this and you are a New Jersey employer, then the answer is yes. But only under certain circumstances. I’ll lay out the test for you after the jump.

How enforceable is a non-solicit agreement after you fire an employee?

October 17, 2010 | by Eric B. Meyer

To answer your question, it depends. And in Pennsylvania, there are a lot of factors that a court will consider, based on a recent case decided by the Pennsylvania Superior Court. But, unlike many prior Pennsylvania decisions that deal with the enforceability of a non-competition agreement after an employee is fired, this recent decision focuses on a non-solicitation agreement.

Read on to find out whether the non-solicitation agreement that an employees signs with your company is still enforceable if you decide to end the employment relationship.
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