My 500th Blog Post

The original title of this post was simply: "Thank you and goodbye."

I have a lot of other stuff I want to do. Write law journal articles. Perhaps start another blog. Do more pro bono work. Learn how to ski. Experiment with vegan cooking.

So ending this at number 500, nearly 6 years after I started, seemed like the right thing to do. And it seemed like the right time, as I just concluded a big trial with immensely satisfying results. (Read here for the news story.)

But I am not ready to let go just yet. So I've decided my readers are stuck with me for a little bit longer. It may be for another 100 posts. Maybe until the end of the year. Who knows? This blog is mine, and I get to decide when I've said all I wanted to say.

So for Number 500, I get to say some things that are on my mind. I'll keep it big and profound.

The Future of Non-Competes

I believe we're close to an inflection point. Having observed the proliferation of non-compete cases and non-compete contracts, I worry about fatigue. I am not "for" or "against" non-competes in the sense that many attorneys are. There are two sides to the difficult questions these contracts pose, and I recognize the arguments are compelling. And when I speak of "fatigue," I am concerned that courts are so accustomed now to these disputes that they view them with less urgency. In this respect, companies don't think through what they're trying to protect and how they're going about it. This is true of both large and small companies, though more so with small ones. Drafting errors abound, and it's somewhat disheartening to see a standard form used for employees with vastly different responsibilities. This, more than anything, causes judges to roll their eyes.

In terms of the inflection point I see on the horizon, I believe the law may be pivoting towards a closer analysis of consideration for at-will employees. Those of us in Illinois can blame the Fifield decision for helping spur this on, but perhaps it's not a bad debate to have. Corporate counsel need to start thinking carefully about the overall structure of non-compete arrangements, and how the issue of consideration might look in an enforcement action. Merely invoking "continued employment" may not be good enough as courts continue to scrutinize enforceability. I personally believe that employers will have to start providing truly meaningful consideration to obtain non-compete agreements. Though consideration costs money, the more thoughtful use of consideration may actually eliminate disputes, as employees will be less apt to challenge the contract on enforceability grounds.

Trade Secrets and the Federal Question

The question of whether we will have a federal trade secrets statute is the hot topic for me and other nerds in my industry. It's truly a debate only a lawyer could love. I believe we'll get some federal legislation in the near future, and the difference between the House and Senate trade secret bills is not significant enough to comment on further. If we get a very watered down bill passed, then perhaps many trade secrets claims will remain in the state courts.

Trade secrets law historically has been the domain of state courts, and I'm somewhat concerned about removing this wholesale (in effect) to federal court. As a practical matter, though, a sizable number of these cases are ending up in federal court anyway under either diversity jurisdiction or as part of a computer fraud case.

Expanding trade secrets law into a federal claim, though, in effect will dump most non-compete cases into federal court, too, since the two theories often go hand-in-hand and the non-compete actions will be part of a federal court's supplemental jurisdiction.

Federal courts may be better equipped, particularly with good magistrates, to handle the increasingly complex discovery issues that trade secrets cases present. Most state courts don't have the resources to manage fast-moving discovery fights or block out time for emergency injunction hearings. Federal courts are busy, but they have the capacity to handle difficult trade secrets cases better than state courts.

Blogging

The amount of blogs on the subject of non-compete and trade secret law really has exploded. I am not sure how I feel about this. This probably is related to the vast interest in this area of the law, the number of interesting topics on which to write, and the fact lawyers seem now to understand the impact blogging can have.

I started this blog in 2008, so I'm a relative veteran but I now find my voice is fairly diluted. Most bloggers end up quitting fairly quickly; others run out of things to say; and for still others, the demands of the job simply cause the blog to get shifted down the priority list. At times, I worry about falling in the last category. I don't ever want this blog simply to be exclusively a sort-of law school case analysis, where I simply talk about a decision. I'd rather comment on the practical impact of disputes, how issues affect clients, and important developments.

I think blogging for lawyers, in this area or otherwise, is definitely here to stay. This is still a great tool for lawyers and, more importantly, for clients to learn the basics of the law without paying legal fees.That's why I will, in the relatively near future, post my last entry here and start a blog. I may start a new blog, because I love to write. I just don't want this site to retread old ground and say things I've already said.

Lawyers

Finding a non-compete specialist is not necessarily that critical for clients. In my opinion, the qualities that make a good attorney by and large carry over to those who represent individuals or companies in competition suits. I do believe that in this area of the law an attorney who writes well is essential. Having someone who is a good trial attorney and presents will in court is crucial, but because many injunctions are decided on the paper, clients need to have counsel who write clearly and understandably.

Also, lawyers have to develop a deeper understanding of the business that is the subject of the dispute. Unlike many areas of the law, competition suits require that the lawyer have a thorough knowledge of the industry and how the pertinent facts fit into the competitive landscape. I frequently see lawyers fumble around with terminology or key business concepts that tend to diminish their credibility. Unfortunately for clients, it does cost a bit more for the attorney to feel as though he or she is sufficiently knowledgeable about the industry as a whole to represent well in court.

Judges

This is an area of the law that continues to divide judges, state and federal alike. Many judges have visceral feelings about enforcing non-competes. This is part of the reason so many non-compete suits settle relatively soon after they start. The lawyers often appear in court quickly after the case is on file, and they then have an excellent opportunity to gauge the judge's reaction to the merits. Contrast a typical Title VII case where a judge may not have an opportunity to assess the merits for 2 years from the filing date.

So a judge's perception of the merits may be colored by where he or she falls on the policy continuum: freedom to compete vs. freedom of contract. Unquestionably, though, the judge will look to whether one of these three crucial factors is at play: (1) the misuse of confidential data or trade secrets; (2) whether there is some bad-faith activity by the employee during the exit process (such as diverting business or parking new clients on the sideline); or (3) the presence of direct solicitation of valuable accounts post-termination in violation of a contract provision.

When one of these facts is in the lawsuit, the defense will have a tougher time prevailing. When all three are absent, the plaintiff is going to face an uphill battle explaining what the injury is and how it is damaged.

Thank You

For those of you who continue to read, thank you. Keeping this blog fresh and full of new content after 6 years and 500 posts is a lot of work but a rewarding challenge. If you have any suggestions or comments, I always invite feedback. Feel free to e-mail me directly at vanko@ccmlawyer.com.