The modern business landscape requires businesses to take meaningful steps to protect their most important assets, often the customer relationships they work tirelessly to build, develop, and retain, and the confidential and trade secret information underpinning their businesses.
Put simply, almost every company has trade secrets — from high‑level product designs and proprietary algorithms to customer lists and pricing strategies — that make it distinct and contribute to its success.
Protecting these assets requires a coordinated strategy that integrates legal safeguards, employee training, and technical controls to minimize the risk of disclosure or misuse. Saul Ewing’s Restrictive Covenants & Trade Secrets practice brings together the resources of our Intellectual Property practice and Labor and Employment group to help businesses and stakeholders navigate this environment.
This multidisciplinary team helps businesses address employee issues related to restrictive covenants, develop trade secret protection programs, and weave those efforts into a broader IP strategy, including counseling on whether to seek patent protection or maintain information as a trade secret. When disputes arise, we litigate trade secret and restrictive covenant matters in federal and state courts and arbitration forums throughout the country. Our experience extends beyond traditional matters involving customer relationships and pricing information; we also handle intricate cases centered on specialized technology or high‑level product designs. Many of these disputes involve software, artificial intelligence, pharmaceuticals, biotechnology, or medical devices.
In these matters, the technical depth of our patent attorneys is critical. Highly skilled at understanding and analyzing scientific data, many hold degrees in fields such as bioengineering, molecular biology, chemistry, and computer science. Having internal team members who understand molecular structure analysis, software code comparison, and complex engineering design and structural mechanics enables us to effectively and efficiently understand and handle complex disputes.
Restrictive Covenants & Employee Issues
We advise employers and help them develop restrictive covenants and employee mobility programs across the United States, balancing protection of business interests with compliance across multiple jurisdictions. Our approach, in helping to develop and implement coordinated policies, procedures and contractual agreements, is designed to help minimize the risks that arise when hiring employees from competitors and maximize the enforcement potential, allowing employers to nimbly develop and revise programs in an ever-changing landscape.
Our services include:
- Reviewing and analyzing agreements and restrictions on incoming or departing employees
- Drafting employment, independent contractor and incentive compensation agreements to help reduce the risk of claims by former employers
- Advising on options when a former employer sues the employer or its employees
- Developing effective restrictive covenant agreements, such as non‑compete, non‑solicitation, confidentiality and non‑disclosure agreements, tailored to evolving state and federal law
- Implementing restrictive covenants in a multi‑state environment
- Counseling on fiduciary duty and duty of loyalty issues, unfair competition, and employee obligations during and after employment
- Counseling companies and shareholders in conjunction with our Transactional Department before, during, and after the acquisition or divestiture process
Trade Secret Programs
As states and the federal government continue to restrict non‑compete agreements, companies must increasingly find ways other than such non-compete agreements to protect their trade secrets and confidential information. We help clients adapt to this evolving landscape.
We assist clients in establishing a trade secret asset management methodology that addresses four key elements—existence, ownership, notice and access—to help demonstrate both the existence of a trade secret and the reasonableness of the steps taken to protect it, should those issues need to be established in court.
Our work includes designing policies and procedures that align with requirements of the Computer Fraud & Abuse Act, the Economic Espionage Act, the Defend Trade Secrets Act, and uniform state trade secret statutes, and cover:
- IT, data security and BYOD policies
- Employment agreements
- Onboarding and offboarding protocols
- Access controls
- Risk assessments
- Third-party management
- Employee training
- Audits and ongoing monitoring
Restrictive Covenant & Trade Secret Litigation
When litigation is unavoidable, Saul Ewing lawyers work with businesses and individuals to immediately help identify and secure crucial evidence, position them to prosecute or defend these matters, analyze the strengths and weaknesses of the claims, and weigh options. Our team has handled hundreds of TRO and injunction cases in virtually every state in the country. Our seasoned trial lawyers regularly:
- Handle disputes involving restrictive covenants (non-competition and non-solicitation provisions), trade secret misappropriation, corporate theft and espionage, unfair and deceptive trade practices and other claims for unfair competition
- Appear in state and federal courts across the country, as well as before arbitration forums such as the AAA and FINRA
- Bring claims against former employees and their new employers, and also defend companies that have recruited and hired employees from competitors
- Represent individuals subject to restrictive covenants, including in disputes involving non-competition, non-solicitation and confidentiality obligations
- Successfully obtain and defend against temporary restraining orders, preliminary and permanent injunctions, along with damages for breach of contract, tortious interference, breach of the duty of loyalty, violation of the Computer Fraud & Abuse Act, business conspiracy, and trade secrets acts
View a selection of our restrictive covenant and trade secret representations.
- A medical device manufacturer in a trade secret/noncompete dispute, where a former employee countersued, claiming over $150 million in damages. Following a two-week jury trial, the jury returned a complete verdict for the client, awarding it damages, including punitive damages, and denying the former employee's claims.
- A medical device manufacturer in a trade secret/breach of contract dispute. Following a week-long trial, the jury returned a complete verdict for the client, awarding it $2 million in damages, and denying a former distributor's breach of contract claims.
- A university in resolving a trade secret misappropriation case concerning cardiac testing data included in patent filings and potentially licensed to a preclinical stage biotherapy company.
- Pharmaceutical companies in a misappropriation of trade secrets and unfair competition lawsuit stemming from documents discovered in related patent litigation regarding a cancer drug. The court issued a permanent injunction in favor of our clients, denying the Chinese “blocking statutes” defenses asserted by the defendants.
- A metals manufacturer in defending a lawsuit alleging that our client stole trade secrets to pretreat aluminum sheets for use in the automotive industry. We obtained dismissal of virtually all claims (originally valued at hundreds of millions of dollars) and a favorable settlement after our client became the net plaintiff on its on antitrust and contract claims.
- An agricultural biotechnology company in a trade secret dispute in federal court in Illinois concerning valuable confidential information related to a system to capture high protein for use in animal feed from the ethanol production process.
- Lead trial counsel for the successful prosecution of trade secret, breach of contract, and fraud claims against the former chief executive officer of a financial services company in the U.S. District Court for the Southern District of Miami.
- Lead trial counsel in the successful defense in a four-day evidentiary hearing for a temporary injunction sought by the Office of Attorney General of the State of Florida for alleged violations of the Florida Deceptive Unfair Trade Practices Act in the Circuit Court of Hillsborough County, Florida.
- A leading renewable energy developer in defeating a motion for a preliminary injunction in a theft of trade secrets suit in New York. The plaintiff, a foreign turbine manufacturer, alleged that our client disclosed trade secrets to the turbine manufacturer that was selected to provide turbines for a federally-licensed hydroelectric public project in Pennsylvania.
- An engineering design firm in defeating an emergency motion for a temporary restraining order which sought to prevent the client from submitting a series of bids to school systems for engineering work based on a trade secret misappropriation claim.
- A multinational insurance brokerage in obtaining a favorable decision regarding employees recently hired from a competitor. The competitor sought an injunction prohibiting the employees from soliciting certain clients. We demonstrated that the employees’ relationships with these clients predated their employment with the competitor, and the court agreed, carving out the preexisting relationships from the injunction.
- A human resources and organizational development firm in an international trade secret dispute with an Argentinian company.
- A multinational professional services company in obtaining an injunction to enforce restrictive covenants against departing employees who joined a direct competitor, including convincing the court that our client’s definition of “restricted clients” included private equity firms that refer business to insurance brokers.
- A waste paper broker who had purchased 50% of the stock of a global paper supplier pursuant to a stock purchase agreement. The paper supplier brought claims for breach of contract related to a restrictive covenant in the agreement. The parties settled favorably after a seven-day bench trial, preventing our client’s international business from being severely affected.