New York Employment Lawyer Blog

Hooters of America restaurant chain ("Hooters") filed a federal lawsuit in Atlanta, Georgia suing competitor Twin Peaks Restaurant alleging that it stole trade secrets and other confidential business information after several of its executives left the company to work at Twin Peaks Restaurants.

Hooters has alleged that its former vice president of operations and purchasing, Joseph Hummel, left Hooters to become partner and CEO at Twin Peaks, a chain of restaurants owned by La Cima. Hooters' has alleged that Hummel stole "sensitive business" information that it had used to grow the business. The lawsuit also alleges that prior to the weeks before his departure from Hooters, Hummel downloaded and e-mailed a "substantial volume" of Hooters documents, which included plans related to management, marketing, recruitment, distribution and sales to his private account. The complaint alleges violations under the federal Computer and Abuse Act and the federal Electronic Communications Privacy Act which make it illegal to steal confidential data electronically. Our attorneys have counseled many companies on how to protect their trade secrets confidential information from departing executives and employees. Call our attorneys if you suspect a departing employee of stealing valuable company information.

Hooters is an Atlanta based company well known for its casual dining and "Hooters Girls" who dress in a white Hooters tank top and orange shorts. Hooters was started in Florida in 1983 and has 455 locations around the world with 67 in the southeast.

Hummel left Hooters for La Cima Restaurants, which owns the Twin Peaks restaurants, which are a mountain lodge themed chain with an all female waitress staff. Twin Peaks has 15 locations in five states where the waitresses serve chicken wings dressed in tan shorts and tiny flannel bikini tops. Twin Peaks' motto is "Eats, Drinks, Scenic Views." Twin Peaks recently announced that it plans to open about 35 franchises throughout the Southeast over the next 10 years. Over the next 7 years, it plans on opening 7 franchises in the Atlanta area, competing directly with Hooters.

Departing executives or employees with access to valuable company information can be disastrous for companies who rely on their trade secrets for their success. Make sure you have your executives and all employees with access to classified information sign a confidentiality agreement as well as a non-competition agreement. It is imperative that before any employees with sensitive information leave your company, they return all confidential documents. Given the ease of transferring information electronically, consider implementing electronic security measures. Once information is stolen and known by your competition, it can't be given back. Limit the number employees you give access to confidential information and make sure your employees don't leave your business premises with classified information or files.

Our attorneys have prepared employment agreements with non-competition and non-solicitation agreements for many executives and employees from varying trades and professions.

If you are hiring or if any of your top executives or employees with sensitive, classified information is leaving to join a competitor, call our Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you prepare confidentiality and non-competition agreements to protect your business.

Continue reading "Importance of Confidentiality and Non-Competition Agreements: Protecting Your Trade Secrets & Proprietary Information" »

Q: After considering several physician jobs, I just received a physician employment contract from a medical practice that I really like. However, the physician employment contract has a non-competition clause that would restrict me for 3 years after my termination of employment within a 10 mile radius of the medical office, which includes 2 hospitals. Should I sign this Doctor Employment Agreement?

A: Non-compete clauses (also known as restrictive covenants) are probably the most important facet of your physician employment contract. They should be negotiated carefully so as to decrease it scope and parameters as much as possible. The non-competition clause of your physician employment contract could mean the difference between having to move and relocate your family in the event the job does not work out. Our Physician Employment Agreement attorneys have helped physicians, medical doctors, physician assistants, nurses and other medical professionals safeguard their careers and their families by evaluating and negotiating the terms of a proper employment contract.

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Possibly - it depends on the reasonableness of the terms. There has been a rise in lawsuits over non-compete agreements given the immense amount of money and time invested into employee training and their value. In this economic climate many employees are transitioning employers and are examining non-compete clauses contained in their employment agreements, confidentiality agreements or severance agreements. A non-compete clause is basically an agreement prohibiting you from leaving your employer and then working for a competitor or opening up your own business to compete with your former employer. Non-compete clauses are most prevalent in the medical, pharmaceutical, technology insurance, financial and entertainment services industries. Even celebrities such as Conan O'Brien, who is prohibited from competing with NBC until the fall, must comply with no-compete agreements. Before you sign a non-compete agreement, our experienced New York employment law attorneys can help you negotiate better terms and protect your rights which could affect your future employment. Our New York employment lawyers can help you get out of your non-compete as well.

New York courts generally do not favor non-compete clauses and do not like the idea of preventing an individual from working but they will enforce your non-compete agreement if its terms are reasonable. For example, in deciding whether a non-compete clause is reasonable or not, the court will examine what geographic area the covenant covers. This is fact specific analysis as a five mile radius in New York City may be overbroad and unreasonable but the same five mile radius in Central New Jersey may be reasonable. Courts consider the length of your non-competition provision. Again, the analysis is unique but terms of over two or three years may be considered unreasonable. If the employee was also a shareholder and owner in the business and signed a non-compete a longer term may be considered reasonable. In addition, the court will consider various factors, including the type of business, the location of the business and the customers, the nature of your responsibilities, the kind of customer contacts you developed, and the availability of comparable positions and the extent to which you can earn a living. Just because your employer drafted the agreement too broad does not necessarily provide you with immunity. New York courts may "blue pencil" or modify the covenant to make it reasonable if the terms are too broad and the agreement indicates that there was intent for the court to do so.

Continue reading "Non-Competition Agreements FAQ: Is my Non-Compete Contract Clause Enforceable?" »