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Courts typically disfavor “covenants not to compete” or “non-compete agreements.”  Therefore, the terms and provisions of these contracts must not be overly restrictive of the employee.  In order for a non-compete to be upheld, the document must “be reasonable in scope, geography, and time.”  It cannot last for years on end, or prevent the employee from working anywhere in the entire state. Likewise, an employer cannot prohibit an employee from working in a large variety of industries, especially if the restriction includes industries wholly unrelated to the employer’s line of work. 

Two other elements are analyzed by a court to determine the validity of a non-compete agreement:  (1) there must be mutual consideration between both the employer and employee at the moment the contract is signed and (2) the non-competition agreement must protect “a legitimate business interest of the employer.”  Preventing a former employee from working for an employer’s business rival, or preventing disclosure of trade secrets or personally identifiable information of important clientele, are typically considered justifiable business interests.

Non-compete agreements are generally implemented to protect a company’s most important assets:  its reputation and its confidential information.  However, the terms protecting these assets cannot be overly broad or vague.  Thus, in evaluating the “reasonableness” of a non-competition agreement, the court will conduct a “balancing test.”  This is a comparison of the employer’s need to protect its “business interests” with the “burden that enforcement of the agreement would place on the employee.” 

The validity of non-compete agreements is decided on a case-by-case basis. The court will consider circumstances such as the length of time certain information will be kept confidential, and the company’s reasons for limiting the employee’s job search to a geographical area. If the court finds that the agreement serves a valid interest and does not exceed the range necessary to protect that interest, the entire agreement may be upheld. 

The court also has the option of doing away with overly intrusive terms in a non-compete, rather than invalidating the agreement entirely. In cases in which a non-compete is perceived by the court as punitive, unduly restricting an employee from obtaining employment, the agreement will not be upheld.  A licensed attorney who specializes in employment law will be able to gauge the likelihood that a particular non-compete agreement will be enforceable.

Many business owners wonder which type of Intellectual Property protection is the best fit for their business purposes?  A “trade secret” is intellectual property that is kept private in order to maintain its financial value in the marketplace.  Examples of trade secrets include: “a formula, pattern, compilation, program, device, method, technique or process.”  

Alternatively, a “patent” generally protects a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”  Thus, a creation may receive protection under either patent or trademark law, but not both, due to varying disclosure rules.  Also, there are several types of patents available, including utility, design, and plant patents. 

Companies that make it a priority to preserve their trade secrets will go to great lengths to prevent others from misusing or misappropriating their critical information. It is likely that a business will seek out the powers of the court system in order to protect the financially viable benefit that derives from their trade secrets. In cases where trade secrets have been violated, courts may order the culpable party to preserve confidentiality or pay expenses, which often include any damages a business sustains as a result of the misuse of a trade secret. 

However, trade secret protection is not without its limits. If a trade secret becomes publically known through an authorized admission, protection may be completely lost.  Additionally, trade secret protection does not protect a business from “independent discovery.”  Independent discovery is when a third party discovers, for example, the formula to a best-selling beverage, on its own.  

On the other hand, trade secret protection usually does not terminate the way other types of intellectual property (such as patents) do.  A patent only protects the inventor for a restricted period of time.  A patent license might not be a good fit if the intention is to keep certain data about the creation a secret.  In order to apply for a patent, intricate details about the device in question have to be revealed, and upon expiration, the information disclosed may become free for anyone to use. 

An intellectual property attorney is capable of evaluating original works and counseling clients on the various types of protection afforded under intellectual property law. He or she will offer good advice about which type of protection best suits each individual situation. 

There is a widespread misconception that verbal contracts are unenforceable.  Nevertheless, a contract made orally with another party, without embodying the particular terms in a signed writing, can still be valid and binding. Even so, any disagreement concerning the deal may pose multiple problems for both parties.  In order for the court to give a verbal contract legal effect, the terms of the deal will have to be demonstrated. This could involve pricey litigation and an extensive discovery process.  Therefore, it is advisable to have an attorney draft any contractual agreement.

Moreover, according to the Statute of Frauds, there are certain contracts that must be in writing in order to be legally binding.  This may include contracts for the sale of land or real estate, surety agreements, in which one person guarantees to take over another’s contractual obligations, and service agreements that take over one year to complete.  Other agreements that must be written to be legally binding may include agreements “made in the consideration of marriage,” or those made for the sale of goods valued at $500 or more. If the requirements for contractual validity are not met, either party runs the risk of the other party rescinding the contract by declaring it void.

The Statute of Frauds not only aims to prevent deception or fraud; it requires precise terms to be set in writing for a contract to be valid. The Statute of Frauds typically requires the document to include a description of the “subject matter” of the agreement, the main stipulations to the deal, and the signatures of the parties.  Nevertheless, these requirements may vary with the sale of goods under the Uniform Commercial Code, where a signature by the “party to be charged” may be sufficient.  For a sale of goods, the terms typically should include the price and quantity of the goods.

Sometimes, if the contract is unenforceable under the Statute of Frauds, it may be saved if one party suffered by relying on the contract and if the injured party can prove this reliance in court.  Likewise, an exception may exist if “specially manufactured goods” were provided under the contract or one party “partially performed” what was required by the agreement.  The outcome may also vary if two merchants were the contracting parties.  Seek advice from a licensed business law and contract attorney to evaluate agreements and determine whether they are legally enforceable.

Authors often want to understand the eligibility of their writings for copyright protection. Legal copyright registration provides the copyright holder with a collection of special rights. Under the U.S. Copyright Act, a rightful owner maintains the “exclusive right to reproduce, distribute, perform, display, license, and . . . prepare derivative works” founded on his or her creations.  However, these “exclusive” rights are curtailed by the “fair use” doctrine, which typically allows others to use your work legally for certain limited purposes, such as “criticism, comment, news reporting, teaching, scholarship, or research.” 

A court makes the final determination about whether a particular use of a registered work comes within the “fair use” doctrine. Factors that a court may use to verify whether a particular use is permissible under the statute may include “the purpose and character of the use.”  For instance, if a third-party utilizes your registered work for an educational and nonprofit purpose, the use is unlikely to be categorized as copyright infringement.  

The court may also look at “the amount and substantiality of the portion used in relation to the copyrighted work as a whole.”  It is likely to be copyright infringement if a large portion of the work has been used, where the user is effectively usurping the work as his or her own.  The court may also analyze “the effect of the use upon the potential market for, or value of, the copyrighted work.”  Furthermore, if a third party did not publish the work in question, the action may still constitute fair use. 

Copyright protection spans “architectural design, software, the graphic arts, motion pictures, and sound recordings.”  Consulting with an intellectual property lawyer will clarify whether a particular type of work qualifies for legal protection. It is important to remember that legal action may not be brought until work is registered, even if blatant copyright infringement transpires. 

Qualified intellectual property lawyers are dedicated to keeping their clients in compliance with the Copyright Office and protecting them from being subjected to the civil fines that may result from improper actions.  Engaging the services of a licensed intellectual property lawyer will not only protect original creations but provide necessary advice on whatever legal recourse is available.  

The law forbids businesses from including baseless statements or assertions in their advertisements.  According to the Federal Trade Commission Act (FTCA), a business must ensure that their representations are not misleading or unfair, and the entity must have data that supports all claims.  Evidence may, for example, be substantiated based by surveys, expert testimony, or scientific studies and tests.

A “deceptive” advertisement, as described in the FTC’s “Deception Policy Statement” is one that suggests or omits a critical fact in an attempt to mislead customers. Similarly, an “unfair” advertisement is categorized as one using a deceptive practice that may result, or has resulted in, significant customer harm. Typically, the harm caused could not be avoided by the customer, and minimal benefit is experienced by any of the clientele engaging in the same practice.

The Federal Trade Commission (FTC) is charged with investigating national ads to determine whether they are fraudulent. Local advertising, on the other hand, is usually the domain of agencies of the county, state, or city, such as the Better Business Bureau (BBB). In both cases, certain criteria are used to evaluate the “words, phrases, and pictures” within the endorsement to identify potential deception. Deception is characterized as that which a “reasonable consumer” would falsely believe to be true.  All investigations are confidential until legal action is commenced or a claim is settled.

There are several remedies available for deceptive claims, including the issuance of a cease and desist order.  Such an order prohibits a business from continuing to disseminate misleading or dishonest advertisements.  A cease and desist order is often combined with substantial fines or with a requirement that the offending company authenticate any and all future ads.  Other penalties may compel a business to notify its customers of the false ads, or to provide refunds for falsely advertised purchases.

Unfair competition may also come into play in cases of deceptive advertising. Companies that feel they have been unfairly treated by competitors may have legal recourse. The National Advertising Division (NAD) is associated with the BBB, and an aggrieved party may file a cause of action against a competitor through NAD.  Depending on the specific circumstances, a business may have the legal authority to sue its rival for posting deceptive ads under the Lanham (Trademark) Act. Individuals who feel their businesses have been harmed by the false or deceptive advertising practices of a competitor may have remedies available to them. A reputable business attorney is in the best position to give advice about which course of action should be pursued.

Most employers know that their workers are protected from discrimination while they are employed.  Surprisingly, some are unaware that prospective employees are protected throughout the application and hiring process as well.  Title VII of the Civil Rights Act of 1964, Title I of the Americans with Disabilities Act, the Pregnancy Discrimination Act and the Age Discrimination in Employment Act of 1967, as well as other Federal and state laws, are all applicable to prospective employees.  Therefore, employers must be extremely careful about the questions they ask individuals applying for a position.

Employers should shy away from asking any questions that might give a prospective employee reason to believe they were not selected for a position due to discrimination.  Employers should not inquire about an applicant’s race, unless it is for an Equal Employment Opportunity Commission purpose (which should be noted).  They should also not ask about an applicant’s citizenship status and instead should inquire as to whether the individual has authorization to work in the United States.

Employers should also be sensitive to discrimination based on gender and sexual orientation when conducting interviews.  They should not ask gender-related questions or anything regarding pregnancy or children.  It is also not a good idea to ask a prospective employee about marital status or religion.  An employer might be concerned that a prospective employee will miss work due to young children or religious holidays.  But, if they are concerned about an applicant’s attendance, they should only ask about attendance records at previous places of employment.  Now, many states have laws relating to discrimination based on sexual orientation and employers should be careful not to inquire about this detail as well.

Individuals with disabilities are protected under Federal and state law.   An employer should never ask about a disability.  All that matters is that the individual is able to perform job duties, so an employer should only inquire about functioning in that respect.  For example, if the applicant is interested in an inventory position that requires standing for the entire 8 hour shift and lifting heavy boxes, but the applicant suffers from a disability, the employer should only ask whether their disability prohibits them from performing these duties.  Many states now have or are in the process of passing laws that prohibit discrimination based on criminal convictions, so employers should be aware not to ask about an applicant’s criminal history unless they are sure it is allowed under their state’s law.  For the same reason, employers should not ask about credit history or personal finances unless these characteristics have a direct affect on the applicant’s ability to do their job.

If you are a business owner, it is in your best interest to put together a list of interview questions for prospective employees and to review that list with an experienced attorney.  You should also be sure that all of the parties conducting interviews are aware of the rules relating to interview questions and abide by them.