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

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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