Practice Strengths

BakerHostetler's national Noncompete and Trade Secrets team comprises nearly 40 partners who have deep experience handling all aspects of the legal issues that arise when employees, groups of employees and non-employee knowledge workers move between competitive firms. Our attorneys' extensive experience also extends to handling noncompete and trade secret issues arising from the acquisition and sale of businesses as well as from other business transactions, including the preparation of executive employment/consulting agreements.

With representation across every continental U.S. time zone, the group provides national litigation and transactional coverage and has extensive knowledge of the relevant laws in nearly every state. We recognize the time-sensitive nature of employee movement issues and related business transactions, and our national footprint with offices throughout the country enables us to respond to any issue at any time.

We represent all parties involved in employee movement matters: employers hiring individual executives and management teams or retaining non-employee advisors; organizations in competitive environments when confronted by individual and group defections; and individuals or groups moving between organizations. We also represent all parties involved in various business transactions where noncompete and trade secret issues are involved.

Through our experience working with financial services companies, hospitality industry clients, technology and media entities, entertainment companies, service providers, manufacturers and industrial interests, healthcare organizations, staffing services, executive search firms and recruiters, pharmaceutical companies and sales and marketing professionals, we have developed a full suite of services and strategies to help organizations protect proprietary information, trade secrets and their overall competitive interests.

Offering Comprehensive Dispute Management
When disputes arise, we represent individuals and organizations at each phase and in every forum—temporary restraining orders (TROs), injunctions and trials in federal and state courts, in addition to matters under the auspices of the American Arbitration Association (AAA), the Financial Industry Regulatory Authority (FINRA) and in private arbitrations. Our capabilities are enhanced by the experience of partners who have tried noncompete cases to verdicts both in litigation and in arbitration, resulting in monetary judgments for our clients seeking to enforce noncompete agreements and in findings of no liability for our clients seeking to avoid the effects of such agreements.

We guide organizations through the series of actions that should be taken immediately upon departure of an employee or others subject to contractual constraints, and we are prepared to represent the organization if problems arise with current or former employees.

To increase efficiency and minimize response time in dispute situations, we also maintain a database of “best practice” pleadings and successful decisions—resources we can call upon at any time to help guide our actions for other clients.

Taking a Proactive Approach
Team members frequently work with organizations on a proactive basis, counseling management and executives on the development of workforce stability programs and other strategies designed to protect the organization's non-patentable trade secrets, customer information and other competitive elements. We also handle many business transactions such as corporate organizations, Limited Liability Operating Agreements, Buy-Sell Agreements, purchase and sale transactions, mergers and acquisitions and tax issues where noncompete and trade secret issues are involved. Our team works closely with attorneys from our Intellectual Property, Business and Tax groups, and we frequently collaborate with our interdisciplinary Executive Compensation practice team.

With that knowledge and insight, our attorneys negotiate, draft and defend/enforce all types of restrictive covenants: noncompete, nonsolicitation, notice and nondisclosure agreements; executive and key employee employment agreements; deferred compensation plans; change-in-control and separation agreements; and equity-award and stock-option plans and agreements.

Handling all aspects of these arrangements—from conceptualization to enforcement—enables the team to appreciate the nuances involved, identify practical approaches and better understand each company's priorities and concerns.

BakerHostetler's Noncompete and Trade Secrets lawyers practice and lecture extensively on these issues, and they serve as expert witnesses in Wall Street raiding and other cases.

Recent Noncompete and Trade Secrets Experience

• Protecting an energy industry leader from misappropriation of trade secrets by former employees aware of the company's engineering practices.
• Securing a temporary restraining order and subsequent preliminary injunction against a former employee, a nuclear pharmacist, and a competitor to enforce a noncompete agreement despite the fact that many noncompete agreements for professionals are not valid in that state.
• Representing an international financial institution in a matter involving allegations of misuse of confidential information and improper solicitation of customers and employees by a former investment advisor.
• Representing a world-class financial services firm in defending against a raiding claim by citing the protocol for broker recruitment against a signatory firm, on behalf of a non-signatory firm, establishing that the protocol rendered the plaintiff firm's position to be contrary to industry custom and practice and not violative of any trade secrets protection.
• Representing a wholesale distributor of construction supplies when a regional executive left to form his own company. The individual has solicited nearly three-quarters of the original company's workforce in the region and diverted some $17 million of sales to his new company.
• Obtaining a preliminary injunction on behalf of an insurance industry client when a significant producer of business (more than $1 million annually) left the company to work for a competitor and began soliciting the company's clients. The case is particularly significant because the noncompete agreement was between the producer and a small local insurance firm that was subsequently acquired by our client.
• Representing a distributor of medical supplies in the enforcement of a noncompete agreement with an employee who was recruited by a competitor. The client had achieved a preliminary injunction and then faced a counter-suit alleging misappropriation of trade secrets shared during discovery.
• Defending an ancillary services provider in the healthcare industry in a misappropriation of trade secret claim brought by a current industry leader. The matter involves e-mail transmission and/or copying of documents prior to an employee's departure to join the entrepreneurial company.
• Negotiating and implementing special compensation arrangements (including dividend and executive bonus policies) for healthcare companies to encourage executive retention and long-term employment.
• Advising an executive team in the development of policies and protections, including stand-alone agreements, for confidential information (such as customer lists, pricing and methods/“know-how”). Also working with the team to establish standard noncompete and nonsolicitation provisions for both executive employment contracts and executive severance agreements.
• Defending a publicly traded financial services and investment banking company and its newly hired president in a bench trial where the past employer sought to prevent the individual from working within the industry throughout the United States. The firm has obtained a favorable settlement allowing the individual to begin working for the new employer, as the noncompete covenant was deemed overbroad and unenforceable.
• Working with a publicly traded company's human resources executive to develop independent contractor and consultant agreements that includes specific protection for trade secrets, confidential information, inventions and original works. The agreements also protect against solicitation and competition from individuals who work with sensitive company materials.
• Defending a seafood distributor and its employee against claims for breach of noncompete and tortious interference with contract. The competitor's motion for a temporary restraining order was denied.
• Defending client against a fired executive's claim for declaratory judgment invalidating his noncompete agreement. The executive's motion for preliminary injunction was denied.
• Representing a leading mailing and fulfillment industry company in enforcing a noncompete agreement against its former vice president, who resigned to join a competitor. We obtained an order compelling the former executive to permit forensic inspection of his computers and other electronic devices. After an appeal to the state supreme court, the defendant has agreed in mediation to extend the terms of the noncompete agreement and to pay the plaintiff monetary damages.
• Representing a national concern of local media franchises (newspapers in 15 markets and television stations in another nine markets) in the drafting and enforcement of noncompete, nonsolicitation and trade secret covenants in talent and other personal services contracts involving on-air personalities, sales executives and senior management personnel.

About Our Employment Team
Ranked among the Top 10 Employment Law Firms by Workforce Management Magazine, BakerHostetler counsels many of the nation's leading companies on all aspects of employment law. With more than 100 lawyers coast-to-coast, BakerHostetler's Employment and Labor Group represents numerous FORTUNE 500 companies, and for many of these companies, we serve as their national employment and labor counsel. Our comprehensive employment practice is comparable in size and depth to the largest employment law boutiques, but we offer the broader resources of a leading, full-service firm.

About Our Litigation Practice
We are regarded as one of the top litigation firms in the country, and our lawyers are nationally regarded for their prelitigation strategies and decisions and their ability to prepare, try and win cases. Our litigators are former prosecutors, veteran civil trial lawyers and former enforcement officials from various agencies with the credentials for inclusion in The Best Lawyers in America and for fellowship in the American College of Trial Lawyers. Whether in defense of our clients or asserting their rights as plaintiffs, BakerHostetler's litigation team knows that winning takes many forms but means one thing: achieving our client's objectives.