RESTRICTIVE COVENANTS

  • RESTRICTIVE COVENANTS

Depending on the client that hires us, our mission in these cases is either to

(a) protect the high-value assets of the employer or

(b) ensure that the employee has maximum freedom to change jobs and advance their careers.

It’s almost always one or the other.

Restrictive Covenants and Trade Secrets Litigation & Counseling

The law provides special rules for reviewing the legality of contract provisions that limit or restrict an employee’s right to work, such as non-compete and non-solicitation agreements. In today’s economy, many businesses derive their competitive edge in the market from valuable intangible assets, such as:

    • Relationships with clients, customers, contractors, and employee
    • Trade secrets and other sensitive, confidential, and proprietary information

A major part of our practice involves disputes that arise when companies seek to enforce contract provisions that bar employees from competing, working for a competitor, soliciting, or disclosing confidential information. These provisions are known as restrictive covenants. They are often included as part of an executive employment agreement, but they can also arise from onboarding documents signed as part of the hiring process or in employee handbooks.

These same disputes often involve claims of trade secrets misappropriation. A trade secret is simply information used in business that is kept a secret by the owner who uses it to obtain economic advantage over competitors who do not know it. It can include a formula, pattern, compilation, program, device, method, technique or process. Trade secrets have long been protected under state statutes and, since 2016 have been the subject of a powerful federal statute, the Defend Trade Secrets Act.

Steve Harvey Law counsels and represents both employers and employees in connection with the full range of issues involving restrictive covenants and trade secrets, including:

Noncompetition or Non-Compete Agreements

Covenants that prohibit a current or former employee from engaging in a business that competes with the employer, typically limited to a defined geographic territory and specific time period. Since the middle ages, these covenants have been disfavored under the law and scrutinized by courts to ensure fairness, but in most states other than California they are generally enforceable if they are supported by consideration.

Confidentiality or Non-Disclosure Agreements (NDAs)

Contracts in which an employee agrees not to disclose a company’s trade secrets and other confidential information to any non-company personnel not entitled to have access to it. NDAs are often drafted to apply during the term of employment and in perpetuity thereafter. NDAs are also used in business negotiations over the sale or development of a business or an asset.

Non-Solicitation Agreements

Contracts in which the employee agrees in writing not to solicit an employer’s employees and customers following the employee’s separation from the company. Given the enforceability issues associated with non-compete covenants, non-solicitation agreements are sometimes used as an alternative to traditional noncompetition contracts.

Trade Secrets Claims

Claims under state or federal statutes governing trade secrets. These statutes usually authorize injunctions as well as money damages and attorney’s fees.

Our Experience

Whether we are retained by an employer seeking to enforce a noncompete or other restrictive covenant, or by a senior manager seeking to change jobs and fend off a covenant enforcement action, Steve Harvey Law is uniquely equipped to provide the practical advice and strategic guidance our clients need in the fast-paced, high stakes litigation that often accompanies restrictive covenant and trade secrets disputes.

We have enforced and defended scores of restrictive covenant and trade secrets claims in state and federal court, and in various alternative dispute resolution proceedings, including related claims of unfair competition and tortious interference with contracts. More than 100 of our cases have involved injunctions and temporary restraining orders.

Given our extensive experience in litigating, trying and settling restrictive covenant and trade secrets claims, Steve Harvey Law also delivers high-quality advice and counseling to employer clients seeking to draft enforceable employment contracts, and to employee clients reviewing offer letters and negotiating new employment agreements.

Diverse Clients

We represent corporations, partnerships, limited liability companies, owners, shareholders, investors, partners, directors, officers, consumers, competitors, employers, and employees. They hail from a wide range of industries including banking, IT, high tech, pharma, clinical research, manufacturing, insurance, health care, finance, real estate, and professional services.

Alternative Fee Arrangements

Because we take the time to understand our clients, we are able to tailor our billing arrangements to suit their unique circumstances. We have the flexibility to offer alternative billing arrangements, hourly arrangements, and to take cases involving substantial damages on a contingency fee basis.

With You Every Step

Whether you require pre-emptive legal advice, a tough dealmaker, a skilled negotiator, a seasoned problem-solver, or a tenacious trial lawyer, the Employment Litigation attorneys at Steve Harvey Law are ready to immediately tackle your complex legal issues with extraordinary skill, integrity, attention to detail, and unmatched cost-effectiveness.

Representative Engagements

    • Obtained preliminary injunctive relief in federal court in New Mexico in an action against a former sales representative of a medical device manufacturer who violated a non-compete agreement
    • Obtained a preliminary injunction in state court in Pennsylvania against former executives of a health care company for violating the terms of their non-solicitation and non-competition agreement
    • Obtained a preliminary injunctive on behalf of an industrial manufacturer in a breach of non-compete action in federal court in Philadelphia against a senior vice president who defected to a competiton
    • Defended a real estate company charged in state court in Pennsylvania with tortious interference with non-compete clauses in contracts of real estate agent
    • Litigated non-compete action through appeal in the U.S. Court of Appeals for the Third Circuit. Victaulic Co. v. Tieman, 499 F.3d 227 (3d Cir. 2007)
    • Litigated a non-compete and trade secrets claim in state court in Pennsylvania on behalf of leading social media marketing company
    • Defended a non-compete claim in federal court in Philadelphia on behalf of constriction estimator charged with violating non-compete and using trade secret
    • Obtained and defeated temporary restraining orders on multiple occasions in Philadelphia state court as well as Montgomery, Chester, Bucks, and Delaware Counties.

Publications

    • Enforcing the Non-Compete and Confidentiality Duties of High-Level Executives, 1998 Employment Law Update (Aspen Law & Business 1998)
EMAIL   info@steveharveylaw.com   |   PHONE  215 438 6600