Archives: Restrictive Covenants

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Restrictive covenants clauses: consistency is the key

Restrictive covenants in employment contracts are a bit like lifejackets: it’s nice to have them there and you hope that they will fit you in an emergency but you would really prefer not to have to use them. That said, if the time comes and your employees are approached by a competitor in breach of … Continue Reading

Costly SEC Settlement Reminds Publicly-Traded Employers of Dodd-Frank Requirements

On April 3, 2015, we reported that the Securities and Exchange Commission (SEC) had sent letters to numerous publicly-traded U.S. companies requesting their nondisclosure agreements, severance and settlement agreements, and other contracts entered into after the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) to determine whether the documents unduly interfere … Continue Reading

Desperately seeking substance – BIS Call for Evidence on restrictive covenants

“We want to ensure that when used, covenants are justified, well-constructed, targeted and reasonable. There needs to be a balance which ensures the employer can protect its business interests when staff move on and the worker is not unfairly disadvantaged when they (SIC) decide to leave or start up their own business“. So says the … Continue Reading

Transfer of undertakings in Poland – do non-competition covenants transfer with the employee?

Earlier this spring the Polish Supreme Court decided that a company taking over a business is not bound by the non-competition covenant entered into by the previous employer.   Normally you would expect the incoming employer to want the covenant to remain in force.  However, to enforce a post-termination non-competition clause in Poland requires the employer … Continue Reading

SEC Clamps Down On Employee Agreements Thought to “Chill” Whistleblower Activity

The US Securities and Exchange Commission (SEC) recently sent letters to numerous, unnamed publicly-traded US companies requesting every nondisclosure agreement, confidentiality agreement, severance agreement, and settlement agreement the companies have entered into with employees since the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was enacted, as well as any other documents related to … Continue Reading

That Delaware choice of law provision might not save your non-compete, at least when California is involved

Last week, the Delaware Chancery Court in Ascension Insurance Holdings, LLC v. Underwood refused to grant injunctive relief to a Delaware company seeking to enforce a non-compete agreement against a California resident.  In that case, Mr. Underwood, a California resident, participated in a sale of business assets and their associated goodwill to the Delaware company.  … Continue Reading

No help from UK Courts for “absurd” non-competition covenant – over to you, employers

A strong message to employers from the Court of Appeal this week to check your restrictive covenants, but this time to do it properly.  None of that just casting an idle eye over the relevant page of your executive’s contracts – description of territory, tick; vague reference to competition, tick; not wholly fanciful restraint periods, … Continue Reading

Keeping it in the family – UK High Court imposes 12 month restraint on father and son team

Sometimes it must be tough being a High Court Judge, especially where you have to separate your distaste for a party’s ethics from the actual legal merits of his case.  So hats off to Mrs Justice Simler for combining in Croesus Financial Services Limited –v- Bradshaw & Bradshaw last week a fairly gleeful trashing of … Continue Reading

UK High Court imposes 12 months’ garden leave on “implausible and opportunistic” stockbroker

In one’s darker moments at work the prospect of 12 months’ compulsory paid leave sounds like the way to go.  In reality, the damage done to your name, skills and client connections could be very substantial.  How could the employer ever justify that requirement?   In JM Finn & Co Ltd v Holliday the High Court … Continue Reading

Webinar: Confidentiality and Restrictive Covenants Around the Globe – Hungary & Russia

In 2013, Squire Sanders is presenting a series of webinars focusing on confidentiality and restrictive covenants around the globe.  These webinars will provide participants with an understanding of the basic principles of restrictive covenants in different jurisdictions. On 14 November 2013 at 1pm GMT (5pm MSK, 2pm CET, 8am EST) our featured countries are Hungary … Continue Reading

Restrictive Covenants Initiative

Thomson v Apem (High Court) “Can you stop 18 employees leaving for a competitor” A recent High Court case (Thomson Ecology Limited & Others v Apem Limited, Hall & Others) serves as a useful reminder to employers about the importance of ensuring that you have appropriate restrictive covenants and confidentiality clauses in place for key … Continue Reading

Webinar: Confidentiality and Restrictive Covenants Around the Globe – Hong Kong & China

In 2013 Squire Sanders is presenting a series of webinars focusing on restrictive covenants around the globe.  These webinars will provide participants with an understanding of the basic principles of restrictive covenants in different jurisdictions. On 26 September 2013 at 9am BST (4pm CST & HKT) our featured countries are Hong Kong and China.  Nick … Continue Reading

Restrictive covenants in Australia – are independent contractors and employees treated equally?

No, a recent decision of the Federal Court of Australia has confirmed. In Informax International Pty Ltd v Clarius Group Ltd [2012] Clarius, a labour hire company, supplied the services of an IT contractor through her own company Informax, to Woolworths. The contract between Clarius and Informax restrained her from working directly for Woolworths for … Continue Reading

The Ohio Supreme Court Reinstates Ability To Automatically Transfer Employee Noncompete Agreements in a Merger

The Supreme Court of Ohio reconsidered and reversed in part its May 24, 2012 decision, Acordia of Ohio L.L.C. v. Fishel (Acordia I) [pdf], that a surviving company in a merger may not be able to enforce employees’ noncompete agreements if the agreements failed to contain an assignment clause. The Court issued a partial correction of … Continue Reading
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