Tom Shumate's Tennessee Non-Compete Law Blog

Scrutiny of Low-Wage Workers' Non-Competes Continues

Sounds like the scrutiny of non-competition agreements for lower-wage workers is picking up steam with the feds. You can read more about the possible involvement of the FTC and DOL here.

Tennessee Legislature Considers Amending Tenn. Code Ann. Sec. 63-1-148 to Exempt Primary Care Physicians from Non-Competes

In Murfreesboro Medical Clinic, P.A. v. Udom, the Tennessee Supreme Court banned noncompete agreements between physicians and their private employers.  The Legislature responded by enacting Tenn. Code Ann. 63-1-148, which allows physician noncompetes in some situations. As enacted, Tenn. Code Ann. 63-1-148 exempts emergency physicians from being restricted by noncompetes.  The Legislature is considering adding primary care physicians to the list of physicians that may not be restricted by noncompetes. The following status of the proposed legislation was provided by the Tennessee Bar Association:

SB 0110 Johnson J. HB 0031 Casada

Covenant not-to-compete exemption: primary care physicians. Exempts primary care physicians, in addition to emergency medicine physicians, from covenants restricting rights to compete. (S: Johnson J.; H: Casada) Senate Status: Referred to Senate General Welfare. House Status: Referred to House General Subcommittee of Health & Human Resources.

Can Making Whoopie (Pies) Compete with Cupcakes?

The Nashville Business Journal and the Commercial Appeal report that the Nashville-based GiGi's Cupcakes franchise is threatening legal action against a former employee who is opening a business in Memphis that would pair cupcakes and other tasty treats, such as whoopie pies and macaroons, with wine.  GiGi's claims the former employee signed a noncompete while working for the franchise and is precluded from opening a cupcake shop.  Sounds like some tasty litigation!

Blog Reports Increased Litigation Regarding Enforceability of Non-Compete Agreements

On his LawMarketing Blog, Larry Bodine reports that the recession continues to boost labor and employment practices and has resulted in increased litigation regarding the enforceability of non-compete agreements.  You can read the entire article here.

Theft of Confidential Information: It's Not A Matter of If But When

According to a recent study by the Ponemon Institute and Symantec Corp., 59% of employees who left their jobs last year stole confidential information from their employers.  67% of those employees use that information at their new jobs.  So it's not a matter of whether employees are stealing their employers' confidential information.  They are.  The real question is what are you doing about it?  Now is the time to implement policies and procedures to prevent the theft of confidential information.  Because once the cow is out of the barn, it's tough to get it back.  Just ask Erin Andrews.

  

 

Down Economy Causing Rise in Non-Compete Litigation?

The Jacksonville Business Journal reports that the poor economy is causing an increase in non-compete litigation.  According to the article, as layoffs increase and more jobs are eliminated, employees are having a harder time finding new jobs.  As a result, more employees are tempted to violate their non-compete agreements.  While I don't disagree with the article as far as it goes, I would add that any increase in non-compete litigation is probably also a function of employers being less tolerant of violators given the state of the economy and their shrinking margins.

Nashville, Tennessee Covenant Not to Compete Attorney -- $200K Non-Compete?

As reported today by nashvillepost.com, CSS Industries, which recently purchased C.R.Gibson, paid at least one employee $200,000.00 for entering a four-year covenant not to compete.  The Form 10K states in part:  "With the acquisition of the C.R. Gibson business, the Company recorded intangible assets relating to tradenames that are not subject to amortization in the amount of $19,500,000. Additionally, the Company recorded $18,900,000 relating to customer lists which are being amortized over 15 years and $200,000 relating to a covenant not to compete that is being amortized over four years."  You can view the full Form 10K here.  Must be nice to get paid more than most people make per year to NOT do your job!