In a much anticipated decision, the Ninth Circuit Court of Appeals held in an en banc decision in United States v. Nosal that the Computer Fraud and Abuse Act (“CFAA”) was not intended to cover employee misappropriation of trade secrets, violations of corporate computer use policies or violations of an employee duty of loyalty.
Continue Reading Ninth Circuit En Banc Decision in Nosal Creates Federal Appellate Court Split On Scope of Computer Fraud and Abuse Act’s Reach to Protect Trade Secrets

More and more these days it seems like the obligations of being a lawyer, husband, father, son, sports fan, etc, get in the way of blogging. As a result, I end up accumulating a number of worthwhile topics for blog posts that end up in the discard pile. Twitter helps keep the backlog to a minimum, but I really don’t know how many of you actually follow me @briandhallesq (hint, hint). So, while I am by no means committing to make this a regular feature of Employer Law Report, I will now clear – in no particular order — my backlog for the month:

According to a Wall Street Journal article, a recent lawsuit seeks a declaration from the New York Department of Labor that putting a GPS tracker on an employee’s family car to uncover time sheet violations was a violation of the state constitution’s guarantee against unreasonable searches and seizures. According to the lawsuit, the monitoring continued during evenings, weekends and a family vacation. This won’t turn out well for the employer.

An Ohio appellate court has upheld a physician’s non-compete agreement that prohibited him from engaging in a hematology or oncology practice in his former employer’s "primary service area." This decision continues the Ohio trend of upholding physician non-competes and Ohio courts have repeatedly rejected the argument that covenants are not enforceable against physicians solely because they impair patients’ choice.Continue Reading Clearing the Backlog – September

The Ohio Supreme Court agreed to hear an appeal that addresses the extent to which a corporate merger may impact the surviving company’s ability to enforce restrictive covenants that its predecessor companies entered into with their employees.
Continue Reading Ohio Supreme Court to Address Assignability of Noncompetes During Mergers and Acquisitions

In Ohio, courts have the discretion to redraw an overly broad non-competition agreement so that its restrictions are no greater than are needed to protect the employer’s legitimate business interests. As a result, Ohio employers often cavalierly draft the terms of their employee non-competition agreements as broadly as possible, believing the worst case scenario is that a court will rein in and “re-draft” the terms if necessary to make them reasonable and enforceable. Unfortunately, a federal district court in Illinois and the Seventh Circuit court of appeals clearly were unwilling to endorse this somewhat common Ohio employment practice despite analyzing a non-competition agreement’s enforceability under Ohio law pursuant to the agreement’s choice of law provision.    Continue Reading Recent Court Decision Highlights Non-Compete Drafting Issues

In a unanimous decision debunking the common misunderstanding that former employees can use information they retain through memory (as opposed to information contained in materials pilfered from former employers) without violating trade secret law, the Ohio Supreme Court ruled that a company’s confidential customer list is a protected trade secret even if a former employee accesses it strictly from memory.

In Al Minor & Assoc., Inc. v. Martin, 2008-Ohio-292, Martin, a pension analyst, signed neither a non-competition nor a non-solicitation agreement during his employment with Al Minor. When he resigned to establish a competing business, Martin contacted and successfully solicited 15 clients using information that he memorized while working for Al Minor. Al Minor sued Martin for misappropriating its trade secret client information. Following trial, Martin was ordered to pay nearly $26,000 in damages to Al Minor, representing lost earnings from former clients successfully solicited by Martin. Although Martin appealed, the Franklin County Court of Appeals upheld the trial court’s decision. Martin then appealed to the Ohio Supreme Court where his arguments in support of his actions were once more rejected.Continue Reading A Case of Mind Control: Ohio Employers Can Stop Former Employees From Using Memory to Misappropriate Trade Secrets

If a Franklin County Court of Appeals decision is upheld, Ohio employers may reap the benefits of even greater protection against former employees who engage in competing business endeavors. For this reason, the Ohio Supreme Court’s ruling will be closely watched by employers and employees alike.

“In the absence of a no-compete agreement between an employer and its former employee, does the employee’s compilation from memory and competitive use of a list of his former employer’s customers constitute a violation of Ohio’s Uniform Trade Secrets Act?” That is how the Ohio Supreme Court framed the issue pending before it in Al Minor & Associates, Inc. v. Robert E. Martin, a case in which the Court held oral argument on November 6, 2007. The case has been briefed and argued – all that awaits now is the Court’s decision.Continue Reading 2008 Will Bring Important Trade Secrets Ruling From Ohio Supreme Court