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Managing the Modern Workplace
V&E International Labor & Employment Resources

  • 18
  • July
  • 2019

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To "Blue Pencil" a Non-Compete — What Does That Mean?

Some people worry about the drafting of non-competes more than others. One reason for this is probably that the people who are more relaxed about how the provisions are drafted are in jurisdictions that have the safety net of local courts that will reform or “blue pencil” provisions that are found to be overly broad. If that’s the case, you might be tempted to ask for a little more protection than you need. But if you are a business that has employees in multiple jurisdictions (whether different U.S. states or different countries), you need to pay closer attention because the way the courts deal with this issue can be very different and could result in an all-or-nothing decision on restrictive covenants that your business is relying on.

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The Westeros Citizens Participation Act (Yeah, Right)

My disappointment with the Game of Thrones’ finale on Sunday night was greatly alleviated by the news on Monday morning that a bill amending the Texas anti-SLAPP law is on its way to the governor’s office. This amendment to the Texas Citizens Participation Act (the anti-SLAPP law) – should it be signed into law by Gov. Abbott – explicitly says that the TCPA does not apply to a legal action arising from an employer-employee relationship (among other relationships) that seeks to recover for trade secrets misappropriation, or seeks to enforce a non-compete or non-disparagement agreement.

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DOJ Settles Enforcement Action Targeting “No Poach” Agreements

In our February post discussing this issue, we predicted that federal criminal antitrust prosecutions of no-poaching and no-hire agreements were on the near horizon due to the U.S. Department of Justice, Antitrust Division’s (“DOJ”) October 2016 guidance alerting companies and HR professionals to beware of the antitrust risk involved in hiring and compensation decisions. Making good on these warnings, the DOJ recently announced a settlement with two of the world’s largest rail equipment suppliers (Germany-based Knorr-Bremse AG (“Knorr”) and Delaware corporation Westinghouse Air Brake Technologies Corporation (“Wabtec”)) to resolve allegations that the companies maintained long-standing agreements not to compete for employees.

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Contributors

Thomas H. Wilson

Thomas H. Wilson Partner

Christopher V. Bacon

Christopher V. Bacon Counsel

Sean Becker

Sean Becker Partner

Stephen M. Jacobson

Stephen M. Jacobson Partner

Martin C. Luff

Martin Luff Counsel

Lawrence S. Elbaum Partner