Noncompete Agreements/ Trade Secrets

The Illinois General Assembly recently passed Senate Bill 672 (“SB 672” or the “Bill”), which codifies Illinois common law standards for enforceability for covenants not to compete or solicit and imposes several additional statutory limitations on employers’ ability to enter into and enforce post-employment restrictive covenants. The Bill, which is expected to be signed into law by the end of the year, follows a nationwide trend among Democratic state legislatures enacting laws designed to limit the use or utility of various restrictive covenants in the employment setting.
Continue Reading Restricting the Restrictions: New Illinois Legislation Would Limit Employer Use of Non-Competition and Similar Restrictive Covenants

A new Illinois law soon will render invalid non-compete agreements with most lower-level employees. Governor Rauner has signed into law the Illinois Freedom to Work Act (IFWA), 5 ILCS 140/1, et. seq., which prohibits private employers from entering into non-compete agreements with “low-wage employees,” defined as $13.00 per hour or less. The law is designed to prevent abuses of non-competes against employees who pose no real threat to their employer. The IFWA applies to non-compete agreements entered into on or after January 1, 2017, the effective date of the IFWA.
Continue Reading New Illinois Law Bans Non-Competes for Low-Wage Workers

The Obama administration announced last week an effort to address what it perceives to be the anti-competitive effects of non-compete agreements on the labor market and the larger economy. This announcement is the latest in a series of federal governmental statements about the impact of non-competes.

First, in March of 2016, the U.S. Department of the Treasury issued a report entitled, “Non-Compete Contracts:  Economic Effects and Policy Implications.” This report decries perceived suppression of wage growth in, and brain drain of highly skilled workers away from, those states most strictly enforcing non-competes. Most interesting (and surprising) is the report’s comments about information protection. It recognizes that [e]mployee departures . . . disseminate improvements in technologies” but sees a benefit in the “information sharing facilitated by worker mobility in some industrial clusters,” because “[w]hile not always in the interest of a particular firm, this sharing can redound to the advantage of the larger economy….”
Continue Reading Obama Administration Announces Effort to Address “Problematic Usage” of Non-Competes

American companies soon will have a powerful new tool to combat the taking and unauthorized use of their confidential business information.  The Defend Trade Secrets Act of 2015 (the DTSA) was introduced on Wednesday, July 29, 2015 with support from both political parties, both houses of Congress, and many companies and business organizations across the country.  After several previously introduced bills withered on the vine, hopes are high that the broad base of support for this bill will carry it through passage.
Continue Reading Newly Introduced Legislation Proposes Federal Civil Claim for Trade Secrets Misappropriation