Ex-Schwab Employee Prohibited from Using Client Information

By Jason Culotta on Posted in Injunction, Trade Secret

In the case of Charles Schwab & Co., Inc. v. Roberto Ivan Ortega (Case No. 4:24−cv−04962), the United States District Court for the Southern District of Texas issued a Stipulated Preliminary Injunction Order on February 12, 2025.

Charles Schwab alleges that Roberto Ivan Ortega misappropriated its trade secrets and client information to solicit the business of former customers after joining a competitor. After Ortega refused Schwab’s requests to return its information, Schwab filed suit and moved for a preliminary injunction preventing the use or disclosure of its information. 

Faced with the reality that a court would likely enter an injunction, Ortega’s counsel agreed to an injunction that prohibited Ortega from using, disclosing, or disseminating Schwab confidential information or soliciting Schwab customers. Ortega is also required to give Schwab access to his computing devices for Schwab to conduct discovery to uncover the scope of the misappropriation. 

​Courts continue to stress the need to maintain the status quo in cases involving the theft of information. Employers must take the necessary steps to prevent the theft of their information and in the cases where their information has been taken, prevent the use or disclosure of that information by filing a lawsuit and seeking an injunction. 

Nuclear Verdicts Hit Trade Secrets

By Thomas Hubert and PJ Kee on Posted in Data Protection, Trade Secret

A Massachusetts federal jury awarded $452 million against a South Korean company after concluding it had stolen secrets related to a wearable insulin patch. Nuclear verdicts are determined as ones that exceed $10 million have grown over recent years. 

While the recent nuclear verdicts have mainly been in personal injury situations, this highlights risks associated with theft of trade secret information. This also highlights the need to perform internal audits on protection of sensitive information. A key to protecting valuable information is taking proactive steps to restrict access to certain proprietary information, including designs of products not readily available in the public setting. 

Click here to read more on this ruling.

Louisiana Court Clarifies Employee Non-Solicitation Provision Requirements

By Joseph Lavigne on Posted in Non-Compete

In a recent ruling, The Louisiana Court of Appeal, First Circuit recently ruled that an employee non-solicit/no-poaching agreement is not subject to the Louisiana non-compete statute but, nevertheless, to be valid, must have a temporal limitation that is reasonable in scope to be enforceable. Because the agreement at issue was open-ended with no temporal limitation, the court ruled it was void and unenforceable.  

Employers should review and, if necessary, revise their employee non-solicitation provisions to make sure they comply with the finding in this case.  

Click here to read more on this case.

Federal Judge Stymies FTC Efforts to Outlaw Non-Compete Agreements

By Joseph Lavigne and Connor Fields on Posted in Federal Trade Commission, Non-Compete
U.S. District Court for the Northern District of Texas Seal

On August 20, 2024, Judge Ada Brown of the US District Court for the Northern District of Texas set aside the Federal Trade Commission’s rule that effectively prohibited the use of non-compete agreements. Interpreting the Administrative Procedure Act, which provides for judicial review of the actions of federal agencies like the FTC, the court found that the FTC’s non-compete ban was unlawful.

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PA Federal Court Denies Request to Enjoin FTC Ban on Non-Competes

By Joseph Lavigne and Madison Gaines on Posted in Federal Trade Commission, Non-Compete

As previously reported, the US District Court for the Northern District of Texas issued an injunction prohibiting the Federal Trade Commission (FTC) from enforcing its non-compete ban, which is set to take effect on September 4. That ruling, however, was limited to the plaintiffs in that case. Similarly, the US District Court for the Eastern District of Pennsylvania had a request before it and denied issuing an injunction against the FTC. It found that the plaintiff, ATS Tree Services, LLC, could not show irreparable harm, but, more importantly, it also found that plaintiff failed to show a likelihood of success on its claims that (1) the FTC does not have authority to issue a nationwide non-compete ban, and (2) the FTC Act unconstitutionally delegates legislative power to the FTC. The Pennsylvania court’s decision on “likelihood of success” is at odds with the finding of the Texas district court, which is an indication that the fate of the FTC non-compete ban will likely be resolved by the federal appellate courts and potentially the US Supreme Court. The Texas district court is scheduled to issue a final decision in the case on August 30, which could negate the non-compete ban for all employers — at least until the appeals courts and the Supreme Court have a say in the matter. 

If you have questions regarding the effects of these decisions on your non-compete agreements, please contact a member of our trade secret team.

Employee Monitoring and Protecting Trade Secrets in Remote Work Environments

By Joseph Lavigne and PJ Kee on Posted in Data Protection, Trade Secret

With large swaths of the workforce working remotely, some employers have growing concerns about employee productivity, as well as information security and confidentiality. In today’s remote work era, organizations face significant challenges in balancing employee monitoring with safeguarding confidential information and trade secrets. This article explores key insights and strategies for HR professionals navigating these complex issues.

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Update – Status of Challenge to FTC Non-Compete Ban

By Joseph Lavigne and Madison Gaines on Posted in Federal Trade Commission, Non-Compete

As previously reported, the consolidated lawsuits challenging the Federal Trade Commission’s (FTC) non-compete ban sought a preliminary injunction and a stay until litigation is resolved concerning the FTC’s non-compete ban. On July 3, 2024, a federal judge in the US District Court for the Northern District of Texas decided that a preliminary injunction was appropriate and temporarily enjoined the non-compete ban from going into effect. It is important to note, however, that the court declined to issue a nationwide injunction to nonparties of the suit. In other words, the FTC’s non-compete ban is still set to take effect on September 4, for any employer that is not a party in the Ryan, LLC vs. The Federal Trade Commission lawsuit.

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Update: Louisiana Legislature Unanimously Passes Act No. 273

By Joseph Lavigne and Samantha Shear on Posted in Non-Compete

The Louisiana Legislature unanimously passed Act No. 273. Governor Jeff Landry signed the act into law on May 28, 2024 and the act becomes effective on January 1, 2025.

Read our previous post, The LA Senate Passes Restrictions on Non-Competes for Primary Care Physicians; SB 165 Now Moves to the House of Representative for a Vote, to learn what this means for primary care physicians going forward.

A Closer Look at the FTC’s Final Non-Compete Rule

By Joseph Lavigne and Madison Gaines on Posted in Federal Trade Commission, Non-Compete

On April 23, 2024, the Federal Trade Commission (FTC) issued its Final Non-Compete Agreement Rule (Final Rule), banning non-compete agreements between employers and their workers. The Final Rule will go into effect 120 days after being published in the Federal Register. This Final Rule will impact most US businesses, specifically those that utilize non-compete agreements to protect their trade secrets, confidential business information, goodwill, and other important intangible assets.

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Lavigne Quoted in TechTarget Article on FTC Noncompete Ban

By Thomas Hubert and PJ Kee on Posted in Federal Trade Commission, Jones Walker Announcements, Non-Compete

Joe Lavigne, a partner in Jones Walker LLP’s Labor & Employment Practice Group and founding member of Jones Walker’s Trade Secret Insider blog, was quoted in the TechTarget article “Election might decide fate of FTC noncompetes ban” on April 26, 2024. In the article, Joe discusses how the Federal Trade Commission’s ban on noncompete agreements affects employers and how any changes to this rule could make operations more challenging for business if reversed following the 2024 presidential election. The rule is expected to take effect 120 days after being published in the Federal Register.

Click here to read the full article.

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