Non-Compete Agreement

Longer Reach Has Advantages in Venue Selection: Texas Lawyer

Longer Reach Has Advantages in Venue Selection: Texas Lawyer

Alan Bush and Lee Winkelman are routine freelance contributors for Texas Lawyer.  Their latest article, “Longer Reach Has Advantages in Venue Selection,” appeared in the December 21, 2015 issue.

Enforcing a non-compete is often easier in your company’s own back yard – and with Texas law.  Companies headquartered in Texas often like sticking local.  Thanks to recent SCOTX and Fifth Circuit rulings, Texas companies have been dealt a better hand to do it. 

Here's what Alan and Lee had to say:

Houston Business Journal: 5 things every employer needs to know about noncompete agreements

The Houston Business Journal has tapped Alan Bush as a freelance contributor again.  His latest article, "5 things every employer needs to know about non-compete agreements," hit the journal on July 15 with the list of Houston's largest labor and employment law firms.

Here's what Alan had to say about non-competes:

Hot industries - like the energy sector - have squeezed Houston's experienced workforce to the point that there are more key job openings than folks to fill them.  Many companies are looking to hire experienced workers from competitors.  Noncompetes, a contract in which an employee promises not to touch certain markets or customer accounts for some period of time, can make or break the deal...

Read the full article for 5 business points on non-competes.

Texas Lawyer: Uniform Trade Secrets Act Texas-Style

Image - Major Changes in the Texas Uniform Trade Secrets Act  

 

 

 

 

 

Texas Lawyer has signed up Alan Bush as a freelance contributor.  His latest article, "Major Changes in Texas Uniform Trade Secrets Act," appeared in the newspaper on May 27. 

Here's what Alan had to say about how the Texas Uniform Trade Secrets Act impacts a fairly common scenario for trade secret theft – when a key employee defects to a competitor:

The Texas Legislature adopted the Texas Uniform Trade Secrets Act (TUTSA), effective Sept. 1. The act is, no doubt, a blockbuster. It blows away years of common law civil remedies for trade secret misappropriation; just check out Texas Civil Practice & Remedies Code §134A.007.

 

Let’s take a look at a few places where TUTSA impacts a fairly common scenario for trade-secret theft: when a key employee defects to a competitor.

 

Up for grabs: Texas courts rarely look outside the state’s borders for guidance. But TUTSA §134A.008 demands it. Courts must apply the act with an eye toward creating a “uniform” law among the 48 states that have adopted the act.

 

The trouble is that states sometimes apply parts of the act differently. Issue-by-issue, Texas courts must now pick the camp to join. My bet is that they’ll stick as closely as possible to the current common law with which they’re comfortable. Only time will tell...

Read the full article for more.  In it, Alan lays out some practical ways the Uniform Act affects:

  • The types of information that will qualify for trade secret protection;
  • Hiring from a competitor without getting tangled up in a trade secret enforcement action; and
  • Cease and desist letters when a key employee defects.

Texas Lawyer: Get Smart About Non-Competes

Texas Lawyer: Get Smart About Non-Competes

Texas Lawyer has signed up Alan Bush as a freelance contributor.  His latest article, "Get Smart About Non-Competes," appeared in the In-House Texas pullout on April 1.

Here's what Alan had to say about respecting a competitors' legitimate trade secrets and non-competes:

Embezzlement Is Old School

Data Stick

Data theft is a company's biggest weakness to fraud—beating out embezzlement for the top spot.  That's according to the US senior executives who were surveyed for the Global Fraud Report issued by Kroll Advisory Services.  You can find the report here.  And employees "are far more often to blame for the loss of information than hackers."

Employees most often steal trade secret data to use it on their next job with a competitor.  Everything from sensitive technical to business information can be vulnerable.  Your competitor has no business learning your secret playbook by hiring away a key employee.

A federal jury recently convicted a former GM engineer and her husband of stealing technical trade secrets for possible use in China.  Here's the story.

Solid HR practices help keep your secret playbook out of your competitor's hands:

  • Non-compete agreements call jobs with a competitor off limits where an employee could benefit most from stealing trade secrets.
  • Reasonable security measures give you the best shot at qualifying sensitive information as trade secrets.
  • Exit interviews about a departing employee's next job can help spot the folks at highest risk for trade secret theft.
  • Forensic IT triage can pat down a high-risk former employee's work computer for digital trade secret theft.

Tweet Rights as Trade Secrets?

 

Many folks use LinkedIn, Twitter and Facebook for business.  When an employee leaves, what's that social media account worth?  Saying that the account password and business contacts are trade secrets, some companies have launched World War III.

Trade secrets enforcement actions over social media accounts have met mixed results.  Some courts have agreed with the company; others have not.

In Texas, there may be an easier way—solid non-solicit agreements.  You're usually concerned about your company's contacts who are customers, potential customers and vendors.  A non-solicit agreement can call those contacts off limits, regardless of who owns the Twitter account.

We have written about non-solicits covering customers and potential customers here.  And about vendors here.

A reasonable non-solicit, however, will eventually expire.  If you're interested in protecting the right to access the social media account and contacts as a trade secret, you may need to keep the account.

Taking a couple steps may move the ball down the field towards trade secret protection.  Ask your employee to sign a social media agreement before anyone creates the business social media account.  The agreement basically sets out your ownership of the account, password and contacts as your trade secrets.  Then, your company creates the account and keeps a copy of the password.  If the employee leaves, change the password when you cut off the employee's other IT access.

Tread lightly here.  Personal social media use is a sensitive topic.  So think very carefully before you ask for a stake in your employees' social media use.  You've got a far easier sell if you're talking about an account that's business use only.

Texas Lawyer – Provisions That Turbocharge a Non-Compete

Texas Lawyer – Provisions That Turbocharge a Non-Compete

Texas Lawyer has signed up Alan Bush as a freelance contributor.  His first article, “Provisions That Turbocharge a Noncompete,” appeared in the December 12, 2011 issue.

Here’s what Alan had to say about how a smartly drafted non-compete can make trial counsel grin from ear to ear: