noncompetition and confidentiality … and...2011/04/15 · please note: we can only certify mcle...

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NONCOMPETITION AND CONFIDENTIALITY

PROVISIONS IN EMPLOYMENT AGREEMENTS

Prepared in connection with a Continuing Legal Education course presented at New York County Lawyers’ Association, 14 Vesey Street, New York, NY

scheduled for November 4, 2015

Program Co-Sponsor: NYCLA’s Judicial Section

Moderator: Hon. Lucy Billings, NYS Sup. Ct.

Faculty: Hon. Salliann Scarpulla, NYS Sup. Ct., Commercial Division; Tracee Davis, Zeichner Ellman & Krause LLP; Rosalind Fink, Brill & Meisel; Kevin Schlosser, Meyer,

Suozzi English and Klein, P.C.

This course has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 2 Transitional and Non-Transitional credit hours:1 Professional Practice/Law Practice Management; 1 Skills..

This program has been approved by the Board of Continuing Legal education of the Supreme Court of New Jersey for 2 hours of total CLE credits. Of these, 0 qualify as hours of credit for ethics/professionalism, and 0 qualify as hours of credit toward certification in civil trial law, criminal law, workers compensation law and/or matrimonial law.

ACCREDITED PROVIDER STATUS: NYCLA’s CLE Institute is currently certified as an Accredited Provider of continuing legal education in the States of New York and New Jersey.

Information Regarding CLE Credits and Certification

Noncompetition and Confidentiality Provisions in Employment Agreements: Current Status of the Law in New York State and National Trends

November 4, 2015; 6:00 PM to 8:00 PM

The New York State CLE Board Regulations require all accredited CLE providers to provide documentation that CLE course attendees are, in fact, present during the course. Please review the following NYCLA rules for MCLE credit allocation and certificate distribution.

i. You must sign-in and note the time of arrival to receive your

course materials and receive MCLE credit. The time will be verified by the Program Assistant.

ii. You will receive your MCLE certificate as you exit the room at

the end of the course. The certificates will bear your name and will be arranged in alphabetical order on the tables directly outside the auditorium.

iii. If you arrive after the course has begun, you must sign-in and note the time of your arrival. The time will be verified by the Program Assistant. If it has been determined that you will still receive educational value by attending a portion of the program, you will receive a pro-rated CLE certificate.

iv. Please note: We can only certify MCLE credit for the actual time

you are in attendance. If you leave before the end of the course, you must sign-out and enter the time you are leaving. The time will be verified by the Program Assistant. Again, if it has been determined that you received educational value from attending a portion of the program, your CLE credits will be pro-rated and the certificate will be mailed to you within one week.

v. If you leave early and do not sign out, we will assume that you left at the midpoint of the course. If it has been determined that you received educational value from the portion of the program you attended, we will pro-rate the credits accordingly, unless you can provide verification of course completion. Your certificate will be mailed to you within one week.

Thank you for choosing NYCLA as your CLE provider!

New York County Lawyers’ Association

Continuing Legal Education Institute 14 Vesey Street, New York, N.Y. 10007 • (212) 267-6646

Noncompetition and Confidentiality Agreements in Employment Agreements: Current Status of the Law in New York State and National

Trends

Wednesday, November 4, 2015 6:00 PM to 8:00 PM

Program Co-Sponsor: NYCLA’s Judicial Section

Moderator: Hon. Lucy Billings, NYS Sup. Ct.

Faculty: Hon. Salliann Scarpulla, NYS Sup. Ct., Commercial Division; Tracee Davis, Zeichner Ellman & Krause LLP; Rosalind Fink, Brill & Meisel; Kevin Schlosser, Meyer,

Suozzi English and Klein, P.C.

AGENDA

5:30 PM – 6:00 PM Registration 6:00 PM – 6:10 PM Introduction and Announcements 6:10 PM – 8:00 PM Presentation and Discussion

I. Statutes a. 2015 Alabama House Bill No. 352, Contracts, use of restrictive covenants

clarified (effective 1/1/2016) b. California Business and Professions Code, Chapter 1, Contracts in Restraint

of Trade, §§ 16600-16602.5; 16606-16607 c. Colorado Revised Statutes Annotated § 8-2-113, Unlawful to Intimidate

Worker – Agreement Not to Compete d. Florida Statutes Annotated § 542.335, Valid Restraints of Trade or

Commerce e. Georgia Constitution, Art. 3, § 6, ¶ V(c) f. Hawaii Revised Statutes Annotated, § 480-4(c), Combinations in restraint

of trade, price-fixing and limitation of production prohibited g. Louisiana Revised Statutes Annotated § 921, Restraint of business

prohibited; restraint on forum prohibited; competing business; contracts against engaging in; provisions for

h. Michigan Compiled Laws Annotated § 445.774a, Agreements not to compete; application

i. Annotated Missouri Statutes § 431.202, Employment covenants enforceable, when--reasonability presumption

j. Montana Code Annotated §§ 28-2-703-705, Contracts in restraint of trade generally void; Exception--sale of goodwill of business; Exception--dissolution of partnership

k. Nevada Revised Statutes Annotated § 613.200, Prevention of employment of person who has been discharged or who terminates employment unlawful; criminal and administrative penalties; exception

l. Revised Statutes Annotated of the State of New Hampshire § 275:70, Noncompete Agreements

m. New York Senate Bill No. S04447, Labor Law, Article 32, Policy Against Restraint of Trade (proposed legislation)

n. North Carolina General Statutes Annotated § 75-4, Contracts to be in writing

o. North Carolina Administrative Code § 29.0502(e)(5) p. North Dakota Century Code § 9-08-06, In Restraint of Business Void –

Exceptions q. 15 Oklahoma Statutes Annotated § 219A, Noncompetition Agreements r. 2015 Oregon Laws Ch. 429, § 653.295, Noncompete Agreements

(effective: 1/1/16) s. South Dakota Codified Laws § 53-9-8-12, Contracts in restraint of trade

void—Exceptions; Sale of good will--Seller's agreement with buyer to refrain from carrying on similar business, validity; Dissolution of

partnership--Agreement of partners to refrain from carrying on similar business, validity; Employment contract--Covenants not to compete; Contracts of independent contractor who is captive insurance agent--Covenants not to compete

t. Texas Business and Commerce Code § 15.50-.52, Criteria for Enforceability of Covenants Not to Compete; Procedures and Remedies in Actions to Enforce Covenants Not to Compete; Preemption of Other Law

u. 2015 Wisconsin Senate Bill No. 69, Restrictive Covenants in Employment and Agency Relationships (proposed legislation)

v. Wisconsin Statutes Annotated § 103.465, Restrictive Covenants in Employment Contracts

II. Court of Appeals Decisions a. BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) b. Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364 (2015) c. Cohen v. Lord, Day & Lord, 75 N.Y.2d 95 (1989) d. Columbia Ribbon & Carbon Mfg. Co., Inc. v. A-1-A Corp., 42 N.Y.2d 496

(1977) e. Denburg v. Parker Chapin Flattau & Klimpl, 82 N.Y.2d 375 (1993) f. Gelder Med. Grp. v. Webber, 41 N.Y.2d 680 (1977) g. Karpinski v. Ingrasci, 28 N.Y.2d 45 (1971) h. Morris v. Schroder Capital Mgmt., 7 N.Y.3d 616 (2006) i. Reed, Roberts Assocs. v. Strauman, 40 N.Y.2d 303 (1976)

III. Other Appellate Decisions

a. 1 Model Mgmt., LLC v. Kavoussi, 82 A.D.3d 502 (1st Dep’t 2011) b. Alex Sheshunoff Mgmt. v. Johnson, 209 S.W.3d 644 (Tex. 2006) c. Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct.

568 (2013) d. Contempo Commc’ns, Inc. v. MJM Creative Servs., 182 A.D.2d 351 (1st

Dep’t 1992) e. Crown IT Servs., Inc. v. Koval-Olsen, 11 A.D.3d 263 (1st Dep’t 2004) f. Del Nero v. Colvin, 111 A.D.3d 1250 (4th Dep’t 2013) g. Delta Enter. Corp. v. Cohen, 93 A.D.3d 411 (1st Dep’t 2012) h. Exxon Mobil Corp. v. Drennen, 452 S.W.3d 319 (Tex. 2015) i. Fewer v. GFI Grp. Inc., 124 A.D.3d 457 (1st Dep’t 2015) j. Good Energy, L.P. v. Kosachuk, 49 A.D.3d 331 (1st Dep’t 2008) k. Goodman v. New York Oncology Hematology, P.C., 101 A.D.3d 1524 (3d

Dep’t 2012) l. Greystone Staffing, Inc. v. Warner, 106 A.D.3d 954 (2d Dep’t 2013)

m. Lenel Systems Intern., Inc. v. Smith, 106 A.D.3d 1536 (4th Dep’t 2013) n. Maltby v. Harlow Meyer Savage, 166 Misc.2d 481 (Sup Ct, New York

County 1995), aff’d 223 A.D.2d 516 (1st Dep’t 1996) o. Meghan Beard, Inc. v. Fadina, 82 A.D.3d 591 (1st Dep’t 2011) p. Samengo-Turner v. J&H Marsh & McLennan (Services) Ltd., [2008] I.C.R.

18 (2007) q. Steiner Sports Mktg., Inc. v. Weinreb, 88 A.D.3d 482 (1st Dep’t 2011) r. Suffolk Anesthesiology Assocs., P.C. v. Verdone, 74 A.D.3d 953 (2d Dep’t

2010) s. Sutherland Global Servs., Inc. v. Stuewe, 73 A.D.3d 1473 (4th Dep’t 2010) t. Titus & Donnelly, Inc. v. Poto, 205 A.D.2d 475 (1st Dep’t 1994) u. Weiser LLP v. Coopersmith, 74 A.D.3d 465 (1st Dep’t 2010) v. Wolf v. Am. Technical Ceramics Corp., 84 A.D.3d 1224 (2d Dep’t 2011) w. Yedlin v. Lieberman, 102 A.D.3d 769 (2d Dep’t 2013)

IV. Other

a. Natsource LLC v. Paribello, 151 F. Supp. 2d 465 (S.D.N.Y. 2001) b. Alexandra Wald and Nathaniel P. T. Read, To Quit or Not to Quit?;

Implications of employee notice provisions, NYLJ, 11/13/12, at S4 c. Mark Poerio, Eric Loi, and Peter Heller, The Basics of Garden Leave – And

Why Careful Tilling Is Needed, BNA Pension & Benefits Daily, 164 PBD, 08/24/2011

2015 Alabama House Bill No. 352, Alabama 2015 Regular..., 2015 Alabama House...

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

2015 Alabama House Bill No. 352, Alabama 2015 Regular Session

ALABAMA BILL TEXT

TITLE: Contracts, use of restrictive covenants clarified, Sec. 8-1-1 repealed

VERSION: AdoptedJune 11, 2015England

Image 1 within document in PDF format.

SUMMARY: An Act, Relating to contract law; to clarify and restate the law relating to restrictive covenants; and to repealSection 8-1-1, Code of Alabama 1975

TEXT:

ACT No. 2015-465

HB352

166383-5

By Representative England

RFD: Judiciary

First Read: 31-MAR-15

ENROLLED,

An Act, Relating to contract law; to clarify and restate the law relating to restrictive covenants; and to repeal Section 8-1-1,Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) Every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kindotherwise than is provided by this section is to that extent void.

(b) Except as otherwise prohibited by law, the following contracts are allowed to preserve a protectable interest:

(1) A contract between two or more persons or businesses or a person and a business limiting their ability to hire or employthe agent, servant, or employees of a party to the contract is permitted where the agent, servant, or employee holds a positionuniquely essential to the management, organization, or service of the business.

(2) An agreement between two or more persons or businesses or a person and a business to limit commercial dealings to eachother.

http://www.westlaw.com/Link/Document/Blob/If23365f010c311e5b361b2cfe8b3769e.pdf?targetType=pending-pdf&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentImage&contextData=(sc.Keycite)http://www.westlaw.com/Link/Document/Blob/If23365f010c311e5b361b2cfe8b3769e.pdf?targetType=pending-pdf&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentImage&contextData=(sc.Keycite)



(3) One who sells the good will of a business may agree with the buyer to refrain from carrying on or engaging in a similarbusiness and from soliciting customers of such business within a specified geographic area so long as the buyer, or any entityderiving title to the good will from that business, carries on a like business therein, subject to reasonable time and place restraints.Restraints of one year or less are presumed to be reasonable.

(4) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from carrying on or engagingin a similar business within a specified geographic area so long as the employer commercial entity carries on a like businesstherein, subject to reasonable restraints of time and place. Restraints of two years or less are presumed to be reasonable.

(5) An agent, servant, or employee of a commercial entity may agree with such entity to refrain from soliciting current customers,so long as the employer commercial entity carries on a like business therein , subject to reasonable time restraints. Restraintsof 18 months or for as long as post-separation consideration is paid for such agreement, whichever is greater, are presumedto be reasonable.

(6) Upon or in anticipation of a dissolution of a commercial entity, partners, owners, or members, or any combination thereof,may agree that none of them will carry on a similar commercial activity in the geographic area where the commercial activityhas been transacted.

Section 2. (a) A protectable interest includes all of the following:

(1) Trade secrets, as defined in Section 8-27-2, Code of Alabama 1975.

(2) Confidential information, including, but not limited to, pricing information and methodology; compensation; customerlists; customer data and information; mailing lists; prospective customer information; financial and investment information;management and marketing plans; business strategy, technique, and methodology; business models and data; processes andprocedures; and company provided files, software, code, reports, documents, manuals, and forms used in the business that maynot otherwise qualify as a trade secret but which are treated as confidential to the business entity, in whatever medium providedor preserved, such as in writing or stored electronically.

(3) Commercial relationships or contacts with specific prospective or existing customers, patients, vendors, or clients.

(4) Customer, patient, vendor, or client good will associated with any of the following:

a. An ongoing business, franchise, commercial, or professional practice, or trade dress.

b. A specific marketing or trade area.

(5) Specialized and unique training involving substantial business expenditure specifically directed to a particular agent, servant,or employee; provided that such training and anticipated expense is specifically set forth in writing as the consideration forthe restraint.

(b) Job skills in and of themselves, without more, are not protectable interests.

Section 3. In order to be valid, any contract or agreement executed pursuant to this act shall be reduced to writing, signed byall parties, and be supported by adequate consideration.



Section 4. If a contractually specified restraint is overly broad or too long unreasonable in its duration, a court may void therestraint in part and reform it to preserve the protectable interest or interests. If a contractually specified restraint does not fallwithin the limited exceptions set out in subsection (b) of Section 1, a court may void the restraint in its entirety.

Section 5. The party seeking enforcement of the covenant has the burden of proof on every element. The party resistingenforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.

Section 6. (a) The remedies available for breach of an agreement subject to this act are:

(1) Such injunctive and other equitable relief as may be appropriate with respect to any actual or threatened breach.

(2) The actual damages suffered as a result of the breach or lawful liquidated damages if provided in the contract.

(3) Any remedies available in contract law, including attorneys' fees or costs, if provided for in the contract or otherwiseprovided for by law.

(b) Nothing in this act shall limit the availability of any defense otherwise available in law or equity.

Section 7. Nothing in this act shall be construed to eliminate any professional exemption recognized by Alabama law.

Section 8. It is hereby declared that this act expresses fundamental public policies of the State of Alabama. Therefore, this actshall govern and shall be applied instead of any foreign laws that might otherwise be applicable in those instances when theapplication of those foreign laws would violate a fundamental public policy expressed in this act.

Section 9. All laws or parts of laws which conflict with this act are repealed, and specifically, Section 8-1-1, Code of Alabama1975, is repealed.

Section 10. This act shall become effective on January 1, 2015 2016, following its passage and approval by the Governor,or its otherwise becoming law.

______________________________________________

Speaker of the House of Representatives

______________________________________________

President and Presiding Officer of the Senate

House of Representatives

I hereby certify that the within Act originated in and was passed by the House 19-MAY-15, as amended.

Jeff Woodard

Clerk

____________________________ Senate 04-JUN-15 Passed

??

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§ 16600. Void contracts, CA BUS & PROF § 16600


West's Annotated California CodesBusiness and Professions Code (Refs & Annos)

Division 7. General Business Regulations (Refs & Annos)Part 2. Preservation and Regulation of Competition (Refs & Annos)

Chapter 1. Contracts in Restraint of Trade (Refs & Annos)

West's Ann.Cal.Bus. & Prof.Code § 16600

§ 16600. Void contracts

Currentness

Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade,or business of any kind is to that extent void.

Credits(Added by Stats.1941, c. 526, § 1.)

Notes of Decisions (244)

West's Ann. Cal. Bus. & Prof. Code § 16600, CA BUS & PROF § 16600Current with urgency legislation through Ch. 807 of 2015 Reg.Sess. and Ch. 1 of 2015-2016 2nd Ex.Sess.


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§ 16601. Sale of goodwill of business or ownership..., CA BUS & PROF §...






§ 16601. Sale of goodwill of business or ownership interest in or operating assetsof business entity or division or subsidiary thereof; agreement not to compete

Effective: January 1, 2007Currentness

Any person who sells the goodwill of a business, or any owner of a business entity selling or otherwise disposing of all of hisor her ownership interest in the business entity, or any owner of a business entity that sells (a) all or substantially all of itsoperating assets together with the goodwill of the business entity, (b) all or substantially all of the operating assets of a divisionor a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (c) all of the ownership interestof any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic areain which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, orany person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein.

For the purposes of this section, “business entity” means any partnership (including a limited partnership or a limited liabilitypartnership), limited liability company (including a series of a limited liability company formed under the laws of a jurisdictionthat recognizes such a series), or corporation.

For the purposes of this section, “owner of a business entity” means any partner, in the case of a business entity that is apartnership (including a limited partnership or a limited liability partnership), or any member, in the case of a business entitythat is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction thatrecognizes such a series), or any owner of capital stock, in the case of a business entity that is a corporation.

For the purposes of this section, “ownership interest” means a partnership interest, in the case of a business entity that is apartnership (including a limited partnership a limited liability partnership), a membership interest, in the case of a businessentity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdictionthat recognizes such a series), or a capital stockholder, in the case of a business entity that is a corporation.

For the purposes of this section, “subsidiary” means any business entity over which the selling business entity has votingcontrol or from which the selling business entity has a right to receive a majority share of distributions upon dissolution or otherliquidation of the business entity (or has both voting control and a right to receive these distributions.)

Credits(Added by Stats.1941, c. 526, § 1. Amended by Stats.1941, c. 845, § 1; Stats.1945, c. 671, § 1; Stats.1963, c. 597, § 1; Stats.2002,c. 179 (A.B.601), § 1; Stats.2006, c. 495 (A.B.339), § 1.)

West's Ann. Cal. Bus. & Prof. Code § 16601, CA BUS & PROF § 16601Current with urgency legislation through Ch. 291 of 2015 Reg.Sess.

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§ 16602. Partners; dissolution or dissociation; agreement..., CA BUS & PROF §...






§ 16602. Partners; dissolution or dissociation; agreement not to compete


(a) Any partner may, upon or in anticipation of any of the circumstances described in subdivision (b), agree that he or she willnot carry on a similar business within a specified geographic area where the partnership business has been transacted, so longas any other member of the partnership, or any person deriving title to the business or its goodwill from any such other memberof the partnership, carries on a like business therein.

(b) Subdivision (a) applies to either of the following circumstances:

(1) A dissolution of the partnership.

(2) Dissociation of the partner from the partnership.

Credits(Added by Stats.1941, c. 526, p. 1834, § 1. Amended by Stats.1961, c. 1091, p. 2821, § 1; Stats.1996, c. 1003 (A.B.583), §1; Stats.2002, c. 179 (A.B.601), § 2.)



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§ 16602.5. Non-compete agreement upon dissolution or..., CA BUS & PROF §...





West's Ann.Cal.Bus. & Prof.Code § 16602.5

§ 16602.5. Non-compete agreement upon dissolution or sale of limited liability company


Any member may, upon or in anticipation of a dissolution of, or the termination of his or her interest in, a limited liabilitycompany (including a series of a limited liability company formed under the laws of a jurisdiction recognizing such a series),agree that he or she or it will not carry on a similar business within a specified geographic area where the limited liabilitycompany business has been transacted, so long as any other member of the limited liability company, or any person deriving titleto the business or its goodwill from any such other member of the limited liability company, carries on a like business therein.

Credits(Added by Stats.1994, c. 1200 (S.B.469), § 1, eff. Sept. 30, 1994. Amended by Stats.2002, c. 179 (A.B.601), § 3; Stats.2006,c. 495 (A.B.339), § 2.)

West's Ann. Cal. Bus. & Prof. Code § 16602.5, CA BUS & PROF § 16602.5Current with urgency legislation through Ch. 291 of 2015 Reg.Sess.


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§ 16606. Telephone answering service; customer list a..., CA BUS & PROF §...






§ 16606. Telephone answering service; customer list a trade secret

Currentness

The customer list, including the names, addresses, and identity of customers, of a telephone answering service shall constitutea trade secret and confidential information of, and shall belong to, the owner of the telephone answering service.

Credits(Added by Stats.1968, c. 720, p. 1420, § 1.)



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§ 16607. Employment agency; customer list a trade secret;..., CA BUS & PROF §...






§ 16607. Employment agency; customer list a trade secret; liability for use of list

Currentness

(a) Except as provided in subdivision (b), the customer list, including the names, addresses and identity of all employercustomers who have listed job orders with an employment agency within a period of 180 days prior to the separation of anemployee from the agency and including the names, addresses and identity of all applicant customers of the employment agency,shall constitute a trade secret and confidential information of, and shall belong to, the employment agency.

(b) Notwithstanding the provisions of subdivision (a), no liability shall attach to, and no cause of action shall arise from, theuse of a customer list of an employment agency by a former employee who enters into business as an employment agency morethan one year immediately following termination of his employment.

Credits(Added by Stats.1973, c. 1116, p. 2282, § 1.)



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§ 8-2-113. Unlawful to intimidate worker--agreement not to compete, CO ST § 8-2-113


West's Colorado Revised Statutes AnnotatedTitle 8. Labor and Industry

Labor I--Department of Labor and EmploymentLabor Relations

Article 2. Labor Relations, Generally (Refs & Annos)Part 1. General Provisions (Refs & Annos)

C.R.S.A. § 8-2-113

§ 8-2-113. Unlawful to intimidate worker--agreement not to compete

Currentness

(1) It shall be unlawful to use force, threats, or other means of intimidation to prevent any person from engaging in any lawfuloccupation at any place he sees fit.

(2) Any covenant not to compete which restricts the right of any person to receive compensation for performance of skilled orunskilled labor for any employer shall be void, but this subsection (2) shall not apply to:

(a) Any contract for the purchase and sale of a business or the assets of a business;

(b) Any contract for the protection of trade secrets;

(c) Any contractual provision providing for recovery of the expense of educating and training an employee who has served anemployer for a period of less than two years;

(d) Executive and management personnel and officers and employees who constitute professional staff to executive andmanagement personnel.

(3) Any covenant not to compete provision of an employment, partnership, or corporate agreement between physicians whichrestricts the right of a physician to practice medicine, as defined in section 12-36-106, C.R.S., upon termination of suchagreement, shall be void; except that all other provisions of such an agreement enforceable at law, including provisions whichrequire the payment of damages in an amount that is reasonably related to the injury suffered by reason of termination of theagreement, shall be enforceable. Provisions which require the payment of damages upon termination of the agreement mayinclude, but not be limited to, damages related to competition.

CreditsAmended by Laws 1982, H.B.1174, § 1, eff. April 6, 1982.


C. R. S. A. § 8-2-113, CO ST § 8-2-113

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§ 8-2-113. Unlawful to intimidate worker--agreement not to compete, CO ST § 8-2-113


Current through the First Regular Session of the 70th General Assembly (2015).


542.335. Valid restraints of trade or commerce, FL ST § 542.335


West's Florida Statutes AnnotatedTitle XXXIII. Regulation of Trade, Commerce, Investments, and Solicitations (Chapters 494-560)

Chapter 542. Combinations Restricting Trade or Commerce (Refs & Annos)

West's F.S.A. § 542.335

542.335. Valid restraints of trade or commerce

Currentness

(1) Notwithstanding s. 542.18 and subsection (2), enforcement of contracts that restrict or prohibit competition during or afterthe term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited.In any action concerning enforcement of a restrictive covenant:

(a) A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whomenforcement is sought.

(b) The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimatebusiness interests justifying the restrictive covenant. The term “legitimate business interest” includes, but is not limited to:

1. Trade secrets, as defined in s. 688.002(4).

2. Valuable confidential business or professional information that otherwise does not qualify as trade secrets.

3. Substantial relationships with specific prospective or existing customers, patients, or clients.

4. Customer, patient, or client goodwill associated with:

a. An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;

b. A specific geographic location; or

c. A specific marketing or trade area.

5. Extraordinary or specialized training.

Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.

(c) A person seeking enforcement of a restrictive covenant also shall plead and prove that the contractually specified restraintis reasonably necessary to protect the legitimate business interest or interests justifying the restriction. If a person seeking

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enforcement of the restrictive covenant establishes prima facie that the restraint is reasonably necessary, the person opposingenforcement has the burden of establishing that the contractually specified restraint is overbroad, overlong, or otherwise notreasonably necessary to protect the established legitimate business interest or interests. If a contractually specified restraint isoverbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shallmodify the restraint and grant only the relief reasonably necessary to protect such interest or interests.

(d) In determining the reasonableness in time of a postterm restrictive covenant not predicated upon the protection of tradesecrets, a court shall apply the following rebuttable presumptions:

1. In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, andnot associated with the sale of all or a part of:

a. The assets of a business or professional practice, or

b. The shares of a corporation, or

c. A partnership interest, or

d. A limited liability company membership, or

e. An equity interest, of any other type, in a business or professional practice,

a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time anyrestraint more than 2 years in duration.

2. In the case of a restrictive covenant sought to be enforced against a former distributor, dealer, franchisee, or licensee of atrademark or service mark and not associated with the sale of all or a part of:






a court shall presume reasonable in time any restraint 1 year or less in duration and shall presume unreasonable in time anyrestraint more than 3 years in duration.



3. In the case of a restrictive covenant sought to be enforced against the seller of all or a part of:






a court shall presume reasonable in time any restraint 3 years or less in duration and shall presume unreasonable in time anyrestraint more than 7 years in duration.

(e) In determining the reasonableness in time of a postterm restrictive covenant predicated upon the protection of trade secrets,a court shall presume reasonable in time any restraint of 5 years or less and shall presume unreasonable in time any restraintof more than 10 years. All such presumptions shall be rebuttable presumptions.

(f) The court shall not refuse enforcement of a restrictive covenant on the ground that the person seeking enforcement is a third-party beneficiary of such contract or is an assignee or successor to a party to such contract, provided:

1. In the case of a third-party beneficiary, the restrictive covenant expressly identified the person as a third-party beneficiary ofthe contract and expressly stated that the restrictive covenant was intended for the benefit of such person.

2. In the case of an assignee or successor, the restrictive covenant expressly authorized enforcement by a party's assignee orsuccessor.

(g) In determining the enforceability of a restrictive covenant, a court:

1. Shall not consider any individualized economic or other hardship that might be caused to the person against whomenforcement is sought.

2. May consider as a defense the fact that the person seeking enforcement no longer continues in business in the area or lineof business that is the subject of the action to enforce the restrictive covenant only if such discontinuance of business is notthe result of a violation of the restriction.

3. Shall consider all other pertinent legal and equitable defenses.



4. Shall consider the effect of enforcement upon the public health, safety, and welfare.

(h) A court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interestsestablished by the person seeking enforcement. A court shall not employ any rule of contract construction that requires the courtto construe a restrictive covenant narrowly, against the restraint, or against the drafter of the contract.

(i) No court may refuse enforcement of an otherwise enforceable restrictive covenant on the ground that the contract violatespublic policy unless such public policy is articulated specifically by the court and the court finds that the specified public policyrequirements substantially outweigh the need to protect the legitimate business interest or interests established by the personseeking enforcement of the restraint.

(j) A court shall enforce a restrictive covenant by any appropriate and effective remedy, including, but not limited to, temporaryand permanent injunctions. The violation of an enforceable restrictive covenant creates a presumption of irreparable injury tothe person seeking enforcement of a restrictive covenant. No temporary injunction shall be entered unless the person seekingenforcement of a restrictive covenant gives a proper bond, and the court shall not enforce any contractual provision waivingthe requirement of an injunction bond or limiting the amount of such bond.

(k) In the absence of a contractual provision authorizing an award of attorney's fees and costs to the prevailing party, a court mayaward attorney's fees and costs to the prevailing party in any action seeking enforcement of, or challenging the enforceabilityof, a restrictive covenant. A court shall not enforce any contractual provision limiting the court's authority under this section.

(2) Nothing in this section shall be construed or interpreted to legalize or make enforceable any restraint of trade or commerceotherwise illegal or unenforceable under the laws of the United States or of this state.

(3) This act shall apply prospectively, and it shall not apply in actions determining the enforceability of restrictive covenantsentered into before July 1, 1996.

CreditsLaws 1996, c. 96-257, §§ 1, 3.

West's F. S. A. § 542.335, FL ST § 542.335Current through Ch. 232 (End) of the 2015 First Regular Session and Sp. A Sess. of the Twenty-Fourth Legislature


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Paragraph V. Specific limitations, GA CONST Art. 3, § 6, ¶ V


West's Code of Georgia AnnotatedConstitution of the State of Georgia

Article III. Legislative BranchSection VI. Exercise of Powers

GA CONST Art. 3, § 6, ¶ V

Paragraph V. Specific limitations

Effective: November 2, 2010Currentness

(a) The General Assembly shall not have the power to grant incorporation to private persons but shall provide by general lawthe manner in which private corporate powers and privileges may be granted.

(b) The General Assembly shall not forgive the forfeiture of the charter of any corporation existing on August 13, 1945, norshall it grant any benefit to or permit any amendment to the charter of any corporation except upon the condition that theacceptance thereof shall operate as a novation of the charter and that such corporation shall thereafter hold its charter subjectto the provisions of this Constitution.

(c)(1) The General Assembly shall not have the power to authorize any contract or agreement which may have the effect of orwhich is intended to have the effect of encouraging a monopoly, which is hereby declared to be unlawful and void. Except asotherwise provided in subparagraph (c)(2) of this Paragraph, the General Assembly shall not have the power to authorize anycontract or agreement which may have the effect of or which is intended to have the effect of defeating or lessening competition,which is hereby declared to be unlawful and void.

(2) The General Assembly shall have the power to authorize and provide by general law for judicial enforcement of contractsor agreements restricting or regulating competitive activities between or among:

(A) Employers and employees;

(B) Distributors and manufacturers;

(C) Lessors and lessees;

(D) Partnerships and partners;

(E) Franchisors and franchisees;

(F) Sellers and purchasers of a business or commercial enterprise; or

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Paragraph V. Specific limitations, GA CONST Art. 3, § 6, ¶ V


(G) Two or more employers.

(3) The authority granted to the General Assembly in subparagraph (c)(2) of this Paragraph shall include the authority togrant to courts by general law the power to limit the duration, geographic area, and scope of prohibited activities providedin a contract or agreement restricting or regulating competitive activities to render such contract or agreement reasonableunder the circumstances for which it was made.

(d) The General Assembly shall not have the power to regulate or fix charges of public utilities owned or operated by any countyor municipality of this state, except as authorized by this Constitution.

(e) No municipal or county authority which is authorized to construct, improve, or maintain any road or street on behalf of,pursuant to a contract with, or through the use of taxes or other revenues of a county or municipal corporation shall be createdby any local Act or pursuant to any general Act nor shall any law specifically relating to any such authority be amended unlessthe creation of such authority or the amendment of such law is conditioned upon the approval of a majority of the qualifiedvoters of the county or municipal corporation affected voting in a referendum thereon. This subparagraph shall not apply toor affect any state authority.

CreditsLaws 1986, p. 1628, § 1, ratified Nov. 4, 1986; Laws 2010, H.R. 178, ratified Nov. 2, 2010.

Formerly 1976 Const., Art. III, § VIII, ¶¶ V, VI, VIII-X; 1945 Const., Art. III, § VII, ¶ XVII, Art. IV, § I, ¶¶ I, II, Art. IV, §III, ¶ I, Art. IV, § VI, ¶ I; 1877 Const., Art. III, § VII, ¶ XVIII, Art. IV, § II, ¶¶ I, III-V.


GA CONST Art. 3, § 6, ¶ V, GA CONST Art. 3, § 6, ¶ VCurrent through the Regular Session of the 2015 Legislative Session


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§ 480-4. Combinations in restraint of trade, price-fixing and limitation..., HI ST § 480-4


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Proposed Legislation

West's Hawai'i Revised Statutes AnnotatedDivision 2. Business

Title 26. Trade Regulation and PracticeChapter 480. Monopolies; Restraint of Trade (Refs & Annos)

[Part I]. [Antitrust Provisions]

HRS § 480-4

§ 480-4. Combinations in restraint of trade, price-fixing and limitation of production prohibited

Currentness

(a) Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce in the State,or in any section of this State is illegal.

(b) Without limiting the generality of subsection (a), no person, exclusive of members of a single business entity consisting ofa sole proprietorship, partnership, trust, or corporation, shall agree, combine, or conspire with any other person or persons, orenter into, become a member of, or participate in, any understanding, arrangement, pool, or trust, to do, directly or indirectly,any of the following acts, in the State or any section of the State:

(1) Fix, control, or maintain the price of any commodity;

(2) Limit, control, or discontinue, the production, manufacture, or sale of any commodity for the purpose or with the resultof fixing, controlling or maintaining its price;

(3) Fix, control, or maintain, any standard of quality of any commodity for the purpose or with the result of fixing, controlling,or maintaining its price;

(4) Refuse to deal with any other person or persons for the purpose of effecting any of the acts described in paragraphs (1)to (3).

(c) Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enterinto any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter,unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commercein any section of the State:

(1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonableperiod of time in connection with the sale of the business;

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§ 480-4. Combinations in restraint of trade, price-fixing and limitation..., HI ST § 480-4


(2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for areasonable period of time upon the withdrawal of a partner from the partnership;

(3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agriculturaluses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and ofthe lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses;

(4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competitionwith the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the terminationof employment, within such time as may be reasonably necessary for the protection of the employer or principal, withoutimposing undue hardship on the employee or agent.

(d) Except as provided in subsection (c)(4), it shall be prohibited to include a noncompete clause or a nonsolicit clause in anyemployment contract relating to an employee of a technology business. The clause shall be void and of no force and effect.

As used in this subsection:

“Information technology development” means the design, integration, deployment, or support services for software.

“Noncompete clause” means a clause in an employment contract that prohibits an employee from working in a specificgeographic area for a specific period of time after leaving employment with the employer.

“Nonsolicit clause” means a clause in an employment contract that prohibits an employee from soliciting employees of theemployer after leaving employment with the employer.

“Software development” means the creation of coded computer instructions.

“Technology business” means a trade or business that derives the majority of its gross income from the sale or license of productsor services resulting from its software development or information technology development, or both. A “technology business”excludes any trade or business that is considered by standard practice as part of the broadcast industry or any telecommunicationscarrier, as defined in section 269-1, that holds a franchise or charter enacted or granted by the legislative or executive authorityof the State or its predecessor governments.

CreditsLaws 1961, ch. 190, § 2; 1965 Supp., § 205A-2; Laws 1967, ch. 49, § 1; H.R.S. § 480-4; Laws 1984, ch. 90, § 1; Laws 2015,ch. 158, § 2, eff. July 1, 2015.


H R S § 480-4, HI ST § 480-4Current through Act 243 [End] of the 2015 Regular Session.


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§ 921. Restraint of business prohibited; restraint on forum..., LA R.S. 23:921


KeyCite Red Flag - Severe Negative Treatment

Enacted Legislation Amended by 2015 La. Sess. Law Serv. Act 404 (H.B. 464) (WEST),

West's Louisiana Statutes AnnotatedLouisiana Revised Statutes

Title 23. Labor and Workers' Compensation (Refs & Annos)Chapter 9. Miscellaneous Provisions (Refs & Annos)

Part II. Contracts (Refs & Annos)

LSA-R.S. 23:921

§ 921. Restraint of business prohibited; restraint on forum prohibited;competing business; contracts against engaging in; provisions for

Effective: August 15, 2010Currentness

A. (1) Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession,trade, or business of any kind, except as provided in this Section, shall be null and void. However, every contract or agreement,or provision thereof, which meets the exceptions as provided in this Section, shall be enforceable.

(2) The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domesticemployer or any other person or entity includes a choice of forum clause or choice of law clause in an employee's contract ofemployment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clausein any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause orchoice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of theincident which is the subject of the civil or administrative action.

B. Any person, including a corporation and the individual shareholders of such corporation, who sells the goodwill of a businessmay agree with the buyer that the seller or other interested party in the transaction, will refrain from carrying on or engaging ina business similar to the business being sold or from soliciting customers of the business being sold within a specified parishor parishes, or municipality or municipalities, or parts thereof, so long as the buyer, or any person deriving title to the goodwillfrom him, carries on a like business therein, not to exceed a period of two years from the date of sale.

C. Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent,servant, or employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of theemployer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities,or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination ofemployment. An independent contractor, whose work is performed pursuant to a written contract, may enter into an agreementto refrain from carrying on or engaging in a business similar to the business of the person with whom the independent contractorhas contracted, on the same basis as if the independent contractor were an employee, for a period not to exceed two years fromthe date of the last work performed under the written contract.

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D. For the purposes of Subsections B and C, a person who becomes employed by a competing business, regardless of whetheror not that person is an owner or equity interest holder of that competing business, may be deemed to be carrying on or engagingin a business similar to that of the party having a contractual right to prevent that person from competing.

E. Upon or in anticipation of a dissolution of the partnership, the partnership and the individual partners, including a corporationand the individual shareholders if the corporation is a partner, may agree that none of the partners will carry on a similar businesswithin the same parish or parishes, or municipality or municipalities, or within specified parts thereof, where the partnershipbusiness has been transacted, not to exceed a period of two years from the date of dissolution.

F. (1) Parties to a franchise may agree that:

(a) The franchisor shall refrain from selling, distributing, or granting additional franchises to sell or distribute, within definedgeographic territory, those products or services which are the subject of the franchise.

(b) The franchisee shall:

(i) During the term of the franchise, refrain from competing with the franchisor or other franchisees of the franchisor or engagingin any other business similar to that which is the subject of the franchise.

(ii) For a period not to exceed two years following severance of the franchise relationship, refrain from engaging in any otherbusiness similar to that which is the subject of the franchise and from competing with or soliciting the customers of the franchisoror other franchisees of the franchisor.

(c) The employee if employed by a franchisor shall:

(i) During the term of his employment by the franchisor, refrain from competing with his employer or any of the franchisees ofhis employer or engaging in any other business similar to that which is the subject of the franchise.

(ii) For a period not to exceed two years following severance of the employment relationship between the franchisor and theemployee, refrain from engaging in any other business similar to that which is the subject of the franchise between the franchisorand its franchisees and from competing with or soliciting the customers of his employer or the franchisees of his employer.

(2) As used in this Subsection:

(a) “Franchise” means any continuing commercial relationship created by any arrangement or arrangements as defined in 16Code of Federal Regulations 436.2(a).

(b) “Franchisee” means any person who participates in a franchise relationship as a franchisee, partner, shareholder with at leasta ten percent interest in the franchisee, executive officer of the franchisee, or a person to whom an interest in a franchise is sold,

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as defined in 16 Code of Federal Regulations 436.2(d), provided that no person shall be included in this definition unless hehas signed an agreement expressly binding him to the provisions thereof.

(c) “Franchisor” means any person who participates in a franchise relationship as a franchisor as defined in 16 Code of FederalRegulations 436.2(c).

G. (1) An employee may at any time enter into an agreement with his employer that, for a period not to exceed two years fromthe date of the termination of employment, he will refrain from engaging in any work or activity to design, write, modify, orimplement any co

noncompetition and confidentiality … and...2011/04/15 · please note: we can only certify mcle...

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