Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

Imagine the following scenario…  Twenty years ago, your Company was the employer at issue in a key Supreme Court of Virginia non-compete agreement case.  Your Company prevailed, with the Supreme Court holding that the Company’s standard non-compete agreement is enforceable under Virginia law.  Relying on that victory, your Company continues using identical non-compete language and believes that it is on firm footing in doing so; after all, the Supreme Court of Virginia - the final arbiter of the meaning of Virginia law - has ruled that your non-compete is enforceable. 

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When asked on November 2, 2010, “Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements,” Georgia voters overwhelmingly answered “Yes.” 

By this vote, the Georgia voters approved the Restrictive Covenants Act, a law that will dramatically alter Georgia’s legal landscape regarding non-compete agreements and other restrictive covenants.  The Act increases the enforceability of these agreements and allows courts to modify them to the extent reasonably necessary to enforce and protect legitimate business interests.  In order to become effective, Georgia residents had to amend the state Constitution -- an event that happened three days ago during Georgia’s general election.  Although there is a question regarding when the Act actually will become effective, by its own terms, it became effective on November 3, 2010.  Below is a summary of some of the key provisions of the new law.

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Hunton & Williams partners Laura Franze and Roland Juarez recently participated in a panel of California employment law experts to discuss various cutting edge issues in labor and employment law, including the impact of social media, new trends in non-compete agreements and trade secret protections, the ripple effect of the Ninth Circuit's ruling in Dukes v. Wal-Mart, and other related topics.

Read the full article here.
 

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On July 20, 2010, Hunton & Williams LLP announced the release of the first edition treatise Privacy and Data Security Law Deskbook (Aspen Publishers).  The deskbook provides a detailed overview of the workplace issues affected by information privacy and data security law and is a practical one-stop loose-leaf guide for privacy professionals, compliance officers and lawyers responsible for privacy or data security. 

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In an effort to ride out the current economic storm, many businesses find themselves downsizing, conducting mass layoffs, and even declaring Chapter 11 bankruptcy in an effort to survive.  These tough decisions inevitably lead to disgruntled former employees, whose ethics tend to take a backseat when it comes to “getting even” with their employers. 

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In California, employers litigating claims for misappropriation of trade secrets must identify those trade secrets with “reasonable particularity” before pursuing discovery.  See Cal. Civ. Proc. Code § 2010.210.  There is frequently an early litigation battle over what "reasonable particularity" means.  Earlier this month, a California Appellate Court recently analyzed this principle in Perlan Therapeutics, Inc. v. Superior Court (Nexbio, Inc.).  The Court initially emphasized the trial court’s broad discretion under section 2019.210.  The Court also warned against the use of catch-all language in the identification statement to preserve the ability to add additional trade secrets to the list after the plaintiff has commenced discovery.

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In Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 2009 WL 1028051 (Tex. April 17, 2009), the Texas Supreme Court held that the covenant not to compete at issue was enforceable because the agreement to furnish consideration (confidential information) for the covenant could be inferred due to the nature of the contract.  The Mann Frankfort Court held that a promise can be inferred when the employee was hired to perform work that necessarily required the receipt of confidential information.  Specifically, the Court stated:

We hold that if the nature of the employment for which the employee is hired will reasonably require the employer to provide confidential information to the employee for the employee to accomplish the contemplated job duties, then the employer impliedly promises to provide confidential information and the covenant is enforceable so long as the other requirements of the Covenant Not to Compete Act are satisfied.

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Franchisors with operations in the State of Georgia are confronting a new challenge in their effort to enforce non-competition rights against franchisees.  In Atlanta Bread Co. v. Lupton-Smith (6/29/09), the Supreme Court of Georgia held that an “in-term” non-competition clause within a franchise agreement is held to the same strict scrutiny standard applicable to post-term and employment contract non-competition clauses.  

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