On December 4th and 5th, nearly 100 trade secret, non-compete, and economic espionage practitioners convened at the Intel Global Headquarters in Santa Clara, California for the annual American Intellectual Property Law Association Trade Secret Law Summit. Two Seyfarth attorneys, Erik Weibust and Daniel Hart, presented a paper co-authored with Andrew Masak and Robyn Marsh, titled “Lawyer Mobility and Trade Secrets Protection: Restrictive Covenant, Confidentiality, and Non-Disclosure Considerations in the Legal Profession.” Specifically, the Seyfarth attorneys, sought to address the question of “what can law firms and companies do to protect themselves – like any other industry – from attorneys who leave to join a competitor? From their paper and presentation,
Attorneys leaving their law firms or companies for other opportunities is nothing new. And, certainly, changing from one employer to another is not unique to the legal industry. As in many other industries, employees switching jobs among competitors can raise serious concerns about the misappropriation of trade secrets and confidential information, and client poaching. Yet, unlike most other industries, restrictive covenants limiting attorneys from competing with their former firms or companies, or taking clients with them, are generally unenforceable. In fact, most successful firm lawyers are recruited to other firms for the very reason that they have “portable” business.
This does not, however, mean that attorneys have free range to take and utilize confidential information and trade secrets about their prior firms or clients who choose not to go with them. Quite to the contrary, there are ethical rules barring such behavior. Nevertheless, the inability of companies and law firms to impose restrictive covenants on lawyers employed by the companies and firms poses practical challenges. Indeed, in-house counsel, who often act as much as business advisors as they do legal counsel, may be privy to the most sensitive business information of a corporation when they leave to join a competitor, yet they, too, are generally immune from restrictive covenants that restrict their ability to practice law, even for a competitor.
In addition to the Seyfarth team presenting their ethics in non-competes presentation, the conference included two days of presentations and debates, including:
- An FBI Briefing on Economic Espionage, “Honey Potting,” and When to Include the FBI in Your Company’s Litigation
- Emerging Best Practices for Protecting Trade Secrets in Employment and Business-to-Business Relationships;
- A Judicial Panel Providing Insights from the Bench on Trade Secret and Non-Compete Disputes;
- Debates on the Future of Non-Competes and Pending Federal Legislation;
- Pros and Cons of Trade Secrets vs. Patents; and
- The Latest on Developing Cybersecurity Standards.
The AIPLA Trade Secret Summit is an annual conference designed for both in-house and outside counsel.