Sign Illinois Trademark Assignment Agreement Fast

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a couple chambers a couple individuals joining us so today I am pleased to welcome Davis Brown law firm here today so Matthew is in charge of kind of patents and intellectual property and then Kelsey Kraus is actually going to cover the employment side of this so we're kind of tag teaming with two attorneys and I'm going to hand it off to them and let them do their own little interest today great Thank You Kristina hello everyone it's a pleasure to be here with you all today again my name is Kelsey Kraus I'm an attorney at the Davis brown law firm and I focused primarily in the areas of employment law and litigation so what that means is I advise businesses and employers on how to comply with state federal and local laws and then I defend them when they get sued or when they want to proceed with a lawsuit to protect their business so throughout this presentation today I'm going to approach it from that background and that angle Matt and I he'll speak to his specialty we routinely work together because a lot of our clients and the businesses we work for need both of our expertise so that's why we're here today yes so as Kelsey said my name is Matt Warner blankenship I'm a patent attorney at Davis Brown I've been there about seven years when we were originally asked to give this talk I started looking at it and thinking about it and it seemed to me that as a patent attorney most of what I do involves helping people secure intellectual property rights so patents trademarks copyrights whatever it is but we needed to it seemed to me that a lot of the problems that faced by businesses these days relate to issues with employees as well and protect and that protection involves kind of Kelsey's end of things so we thought made sense to do it together so I do want to spend a moment here let's see there we go our disclaimer I don't know if this pertains as much to Matt's world it might but certainly in my world of employment it's very fact and a lot of the advice we give can change on a single fact and so that makes it very complicated for you guys and for us so we're gonna try to hit the the high points of some advice in how to protect your intellectual property in your business when employees come and go but please keep in mind these are really red flags and generic general advice it's no substitute for your own independent legal advice I imagine it's the same thing for IP ok great so keep that in mind and I also want to point out that we are hoping that this presentation will be conversational we don't want to talk at you we want to talk with you so we invite questions at any time throughout this presentation if you have any questions just raise your hand or shout out the question and we'll try to speak to it same thing with those tuning in via the webinar we have a way for you to get your questions to us so please ask any questions at any time all right so we are going to talk about the five ways you can protect your business in regard to intellectual property and protecting your business interests when employees come and go so we're gonna the first three areas of this presentation are focused on intellectual property and steps you can take to protect that area of your business and then I'll end the presentation talking about some of the employment aspects in ways you can protect your business outside of intellectual property which of course they go hand-in-hand okay I think I start here so one thing that I wanted to mention just kind of briefly this isn't really a talk about securing an electoral property per se it's more of a talk in terms of dealing with the Patent and Trademark Office but it is important to kind of cover what the basic what we really mean when we're talking about intellectual property there are four kind of canonical IP rights that we talk about most people think about it what IP means patents trade secrets trademarks and copyrights and each one of those four do things for different areas protects sort of different aspects of what a business might want to protect about ideas and content that they generate mm-hmm patents are kind of the classic example they protect your ideas so your your process that you might have any product that you have devices you know machines things of the things of that nature sort of fall into the into the patents go patents don't last forever they last for some period of time but not it's not indefinite and so part of the the bargain and this is important to be kind of aware of when you're thinking about what your intellectual property strategy is going to be is that patents you know and trade secrets however can last indefinitely until they're actually revealed so you know the formula for coca-cola was still considered a trade secret and it's been and that that's been the case for you know time immemorial so again trade secrets protect confidential information and this this can be things along the lines of patents so products so certain kinds of processes in particular and then things like customer lists marketing plans other things that are sort of business intelligence that you may have inside your company that you may not want to let out for whatever reason because it could be valuable to a competitor all of those kinds of things can kind of fall under the broad definition of trade secrets trade secrets are sort of different than the other categories here and that there are less formal procedures for securing them you know you don't reach out to the Patent Office there's no trade secret office that sort of says that's a bonafide trade secret you just have to keep everything really close to the vest and and and the best way to do that is through a combination of you know internal procedures and the way in which you deal with your employees and and and sort of just keeping it secret around the around the business trademarks actually relate to the brand themselves so you know Apple is a good example trademarks are something that that are you know refer specifically to the company in almost all cases or the product itself and not the people behind it or the way in which it's made or anything like that so in a lot of ways trade trademarks are fairly straightforward for companies to protect if as long as they as long as you're going out and using as in association with your business you get some you get some protection over that and then we've got copyrights which relate to the expression of ideas so what that means traditionally is things like books music works of our movies things like that but it also can apply to software and it's important when thinking about you know if you're if your business has software that they've developed its proprietary you might want to think about whether or not it makes sense to try and go after a pad and oh and that software or to try and protect it through sort of copyright schemes or other methods of keeping it or other methods sort of keeping it back behind the book so nobody can actually see what it is the thing to know really about software is that the patent system is pretty pessimistic about software so getting patents Andres often was pretty difficult in the patent system also takes a long time and software tends to move pretty fast so that's just kind of the five minute overview of exactly what we're talking about I'm gonna interrupt here for the sake of those two unity in the webinar I'm going to repeat the question and I think your question was does the trademark have to be registered and so that's the question that how would you answer that that's that's right he answered the short answer to that is no I mean it depends on but as soon as your business is out of using it mark in in commerce you get common some of that so there are all sorts of state laws that allow you to pursue a competitor now the scope of that is questionable you know if it's someone in Maine and you're doing it here in Des Moines you may not have any recourse against them because you don't have a federal protection you could reach out to the trademark office you can actually apply for a federal trademark registration of the chamber house broad nationwide priority that's a good question they do have to be applied for although it's not as stringent as the requirement for that patents miracle be mindful with a patented invention you issue as you disclose that the clock starts ticking and you have to apply for it with that office in order to get that protection with copyrights technically attaches from the moment of creation so as soon as I draw a doodle that's happening right there I can pursue someone else for copying that people that I drew with that actually haven't been registered at the time I did it now registration early is provide certain statutory benefits to you so it makes it easier as a plaintiff to go after someone if you've registered it early on in the process but you don't have to do that until you know if you find if you're copping I do when I would go after you it's three years later I can go ahead and [Music] right but you can't yeah you can't it's pretty it's pretty straightforward to process you know I think one of the things to consider and one of the things I want to stress is that when you think you had something this protectable IEP you shouldn't you should try and use make sense a lot of time as soon as possible there are benefits all three in these three statutory cases there are benefits to going and applying a patent office life during our office to client libraries and with these two in particularly with tree works calculates the processes not as expensive as you might think it is patents I miss pencil Indian independence Jeep but copy the filing fees your copyrights trademarks were quite useful and worth doing early on because it takes as you might guess it takes some time to actually process your application does anybody else I'll talk about some of the contracts you might have with your employees later on in this presentation and if those get litigated and you know there's a issue about whether we can enforce those agreements one of the factors that a court might consider is what steps have you as an employer or a business taken to secure the information you now are concerned about being released so if you have taken steps along the lines here of what Matt just talked about that can that can used you know we're trying to argue you know we need this protection court and here's examples of what we've done to try to protect in our business information good point so I guess part of what I wanted to stress here is that these are this in addition to these being kind of the traditional categories of IEP rights one of the best things you can do to protect yourself and your IP is this IP is to go and talk to someone or early about securing those rights once you identify them any steps that you take early on in the process will definitely save you pain to that end you know part of what we're talking about here is the relationship with employees and one of the first things that you can do so our number one on our lists is putting together assignment agreements that convey IP rights to the employer upon creation so this can kind of happen in two general ways and we'll talk about that at first I want to talk about what happens if you don't have if you don't do this you don't have any intellectual property provisions in place there are a couple of things a couple of provisions that are a couple of generalities that we can make about what will happen if you've got an employee that was not hired specifically for the purpose of inventing something for instance in the patent context the employee typically owns the anything that's embedded during the course of the employment and the Supreme Court has upheld this repeatedly that that when an invention is made if it immediately vests in the the inventor no matter what and then it by operation of contract it is given to the employer depending on the circumstances this is only applies as a generality if they're not hired specifically for the purpose of inventing something so under operation of certain kinds of state law if you are employed to invent a patent will vest in the employer but in other all other circumstances the employee typically owns it so this is something to be aware of in the event that that does happen in the patent context the employer does get a shop right but that is certainly not something that I would want to rely on and that's that's basically that even if in that in that event the company gets a non-exclusive royalty-free non-transferable license to use it and to make and use it here's another generalization an employee that is hired to invent will likely be obligated to assign the IP right so that's the flip side of the first coin but this is certainly not a guarantee and there are all sorts of things reasons and cases that have happened that have allowed employees to invent something wat and walk away with it or license it to other folks so what do you do you get an assignment agreement when when you have an employee that has invented something it is as a normal part part of your business you should have them execute assignment agreements that a sign alright and title in that invention or creation of whatever sort to to you so that you are the owner and then you can take over any enforcement of that intellectual property right these can often be included in an employment agreement although it's important to note that we have a lot of independent contractor situations where this also is important and you may hire a designer or an inventor or some other content creator that to work on a project for you and if you don't have it in contracts that the what they create for you it belongs to you they're likely going to be able to walk away with it so this happens a lot in in sort of a software context where software designers you know engineers try not to get bogged down into agreements and they want to create you a web page they want to create some other piece of software for you and then they want to walk away and sell their services to someone else and recycle a lot of the content that they've used before you know they've got their sort of their toolbox of things so this is a negotiable point when dealing with with a contractor of that sort but it's something you need to be mindful of because down the road if you want to go after someone for copyright infringement for instance you may not have the right to do that if the if your contractor is hold it go ahead [Music] so how does this what should I do is my employee sure okay so the question is ladies in this room on the are works at a design firm and so she collaborates with her employees on the design of furniture and so she's wondering you know what can she do to prevent one of her employees that is collaborating with her and the designs from taking a design and you know using it with another business or employer or setting up shop across the street and using those designs that's a good question the that's a its Baxter so their candidates are specific to your situation I would say your field in banking on one of the traditional areas of intellectual property protection is not as sure that doesn't necessary work make covenants as well so this is what I would call the suspenders thing where you can try and wrap it up with one thing but also I would always use a tourney's contractions which constitute a clutch on the end of it it's a way to sort of prevent competition what you can do by the third-party competitors inconvenience that birth collaborators that's I think so I'll try to touch on that here later in the presentation and so there's options a lot of what Matt and I will touch on that we can do to try to protect you know those issues as much as possible but they're not always bulletproof and a lot of times the employers goal in terms of you know do we want to just deter an employee from leaning all together and kind of threaten what could happen if they do it sometimes that sound clients you know objectives other times it's you know we don't want that information to get out but we want to be reasonable from the get-go and we want our contracts to be reasonable and so even what the clients goal is you know it's something that we've tried to find out right from t e start so that we can draft those agreements to foster that goal and so I'll come back to that later in the presentation types plus know-how or any sort of other proprietary information that you want to be covering with an employment with that kind of agreement and it is it is the primary mechanism for protecting patent rights in copyright so that that kind of relates to what I was saying earlier about belt-and-suspenders to some extent you know you apply for it you can go get it for four patents and copyrights but you need to have an assignment agreement in place or some other obligation to assign to you in order to have an undivided interest in and and and be able to actually prosecute it yourself so it's it's gets you off the ground yeah and so you can use it in the others as well but but it's particularly when you're dealing with patents and have your rights be very mindful of the agreements that are in place with the creator's coming to you this is based on a fairly recent Supreme Court case but you the the upshot is avoid an agreement to agree to do something you don't want to sort of do a handshake and say this is the this is what we're gonna do and we'll get it you know memorialize later you want to have the agreement in place up front before you get started with things and the actual language agreement to agree is a reminder that it's there was a there was a case in which there were a patent case in which there was a disagreement about individual language inside and assignment agreement mattered and so it's important to have someone you know not just have a napkin on the back of it right right something on the back of a napkin but actually have the proper magic words or the appropriate assignment language in place when you're agreeing to an assignment they can be broad so take advantage of it let's move on a little faster established procedures for timely disclosure of inventions and other protectable intangibles so this these are related but you know if you're in a business where you doing research in television if you're collaborating a lot you need to have standard practices you need to I'm not saving practices inside the organization that say okay someone's had an idea what do they do with it because oftentimes if you know in the case where you don't have those kinds of procedures and sort of culture in place you folks come up with things all the time and you're you're a and we're losing them and bu you may not even be aware that they they've happened someone may have figured out a new way of doing something an industrial process and you may have had a system for once Jerid to disseminate amongst other employees they know about something that's been approved it's been made so it's important to service for a variety of very practical reasons it's important to have procedures in place where someone where people are thinking should this be protected should this be disclosed [Music] so that's a that's the real takeaway message I sort of stepped on my next slide here but stay informed of your business's innovations be aware what your employees are doing and then create an obligation of disclosure in the employment contract it's actually possible to sort of write that into your employee handbooks and you have the materials that your that your employees receive and then provide them with sort of disclosure what we would call disclosure form so they actually record that they've come up with a new idea or a new process or a new creation and those are you know given to a point person and then run up the chain to see what you want to do with them again this is contract I've got too many slides on the same topic here create a contractual obligation with your employees so a state of the operating procedure is helpful in establishing legally relevant requirements but contractual obligations are stronger I mean it's always a contract issue I'm gonna jump in here because you know matt said pay attention to what your employees are doing it's also important to update you know the documents that you use because a start-up company may grow and just take off and become a very large company and so you might have job descriptions in place at one time and you might have an employee that stays with you for 20 years and so that person's you know access to your confidential information may evolve and may change and so sometimes we see businesses and employers get in trouble when they don't update their documents because when we're trying to enforce those contracts you know the more current they are in terms of how much know-how that that individual has is important and so you know updating your employment policies or updating any confidentiality agreements that you have with employees so that if your business evolves we can make sure that the confidential information that you want to protect is in those agreements and it's specific and we have it covered and so just kind of docketing that on an annual basis to kind of reflect you know where's our business at now is a really good best practice that's exactly right so the third point that I wanted to get to because keep to keep moving along here is fostering innovation through innovation incentivization so in a kind of part and parcel with establishing procedures for the timely disclosure you can foster a culture inside an organization that sort of incentivizes actually making those kinds of disclosures and and producing protectable ideas some of the you know motorola and IBM and both been huge success stories with this they have they have always incentivized their employees for bringing patentability patentable ideas for where they actually get awards for you know for it and then monetary bonuses the I think it's important to note that the patent system for example is built on the theory of incentives the entire idea behind protectable intellectual property from the time of the writing of the Constitution was that they understood that if you could protect intellectual property that providing protection for intellectual property incentivize people to create things and I think that that trickles down to inside an organization as well so if you say you know inventors are rewarded in some way for coming up with inventions there's the amount of monetization for the organization is hard to calculate it compared to what you know you might be doing in terms of bonuses yeah that's really covers exactly what I wanted to say about that so the next issue and this is where we sort of transition over to Kelsey it's talk about non-disclosure non-solicitation agreements that can protect your IP so you want to take it from here I do so along the lines of kind of the culture associated with you know how do we protect our business in this you know world we live in now or the unemployment rate is at an all-time low it makes it very difficult because a lot of employees are looking for maybe the next best job and so employers and businesses are faced with you know what do we do when our employees leave and what do we do when we want to look at another business to try to bring talent to our company of course you know the best approach is to evaluate you know who are those employees within your company that can do harm to your business that you know have a lot of your confidential information and if they do set up shop across the street you know who are those employees and then making sure that we have agreements in place for them so we're going to talk about three different types of agreements non-disclosure agreements non-solicitation agreements and non-compete agreements and so I'll kind of give you some background about how businesses can use these three different agreements and some of the issues that arise when we try to enforce them in full disclosure I've been on all sides of these contracts have been retained by businesses to draft them I've been retained by businesses to enforce them or to get around them another and so I've seen it from all sides that's why you know your goals and your objectives matter as we discussed with the unemployment rate being an all-time low another best practice that you guys can implement is when you're onboarding employees or when you're interviewing individuals you may want to inquire about whether they are subject to a non-compete or a non-disclosure agreement or a non-solicitation agreement because I have also employers and companies when they've been sued for tortious interference with a business contract or a business relationship and so that's arose when an employee tried to poach you know a high valued employee and the employer knew that there was the non-compete agreement in place and it doesn't mean that we can't you know defend against a claim like that because the agreement may be unreasonable and unenforceable but it may be an issue that you might want to be aware of in terms of onboarding your employees so let's start with non-disclosure agreements so non-disclosure agreements are when you ask your employees not to reveal your confidential information so you can have this in place and as Matt touched on earlier there this is one of the what we call restricted covenants when if the you know things not to do that we're trying to prevent the employee to not do certain things those are called restrictive covenants and for this particular restrictive covenant you don't need a time limitation on it so Matt mentioned the coca-cola recipe so those you know employees that know that coca-cola recipe they probably have a non-disclosure agreement that prevents them you know throughout the duration of their lives from disclosing that secret recipe and so that's okay what's not okay is sometimes businesses and employers think well you can't talk about my business at all and I can control what you say and when you say it and if you say it on social media and so that becomes problematic because of course in my world of employment there's a lot of government agencies that care what some of your employees have to say in regard to OSHA and safety harassment and discrimination you know the Department of Labor in terms of employees talking about their wages and their compensation and that sort of thing so for non-disclosure agreements there's a couple of different things we need to be mindful of first of all how do you define confidentiality that should be in your employee handbook you should have a confidentiality provision in there but we also need to make sure that we define it and we define it in a way that's enforceable so that it's not over broad because there have been issues where different governmental agencies say you know hey employer you're overstepping your bounds you're trying to prevent you know a whistleblower somebody that observed fraud from reporting it and you can't do that so of course in the employee handbook we want to define confidentiality and then in the non-disclosure agreement we want to do that as well so here's the trick we want to define confidentiality and we want to define what it is you're truly concerned about but we also want to be broad enough to protect your business as it grows and so it's a little bit of a dance in terms of you know how we define it and that varies depending on the business so to enforce non-disclosure agreements courts use a three prong test number one it must be reasonably necessary to protect the employers business number two it cannot unreasonably restrict the employees rights and that's where we talked about you know harassment discrimination OSHA violations and number three it cannot prejudice the public's interest so the employer has the burden when trying to enforce any of these restrictive covenants and this one you know if it's drafted well is in my opinion the easiest one to enforce because oftentimes it's the less detrimental to your former employee all right so let's move on here and talk about non solicitation agreement one of the things that also need to be mindful about does not have to only be used in the employee context you can also use it with independent contractors or other parties that you may be seeking to have a collaborative relationship with and a business partner of joint venture anything like that you can you can use an NDA to protect yourself and those sorts of circumstances there are many circles I see I often see situations where two businesses two different businesses want to sit down with each other and they'll mutually agree to non-disclosure of one another's ideas and then in the event that something pops up later on and you know you're you you sat down you shared your ideas nothing comes of it and then later they start making your your widget you can go after them under contractual means which is much much easier than going after them under an intellectual property Theory alone so patent infringement is extraordinarily expensive but suing for a breach of contract is much easier thing to go after someone for absolutely and you can also when you establish business relationships with others and you want non-disclosure agreements with that business you can also have a clause in that contract that you expect them to have non-disclosure agreements with their employees so that you know you don't partner with some business and then that employee you know takes a photo of some machine in your business and then posts it you know on social media later on you can show that you took steps to protect that information that's you know something that you can ask for with your business partners alright so non-solicitation agreements this is narrower than non-compete so this is when you don't want a former employee to be able to contact your clients or your customers after they are you know while their current employees to set up a competing business or afterwards and so you can have this type of restrictive covenant to help protect against that so similar to on the non-disclosure agreements the courts use the same three prong test and it's really all about reasonableness and that makes it very difficult and very fact-specific for the employer because we need to defend you know why do we need an on solicitation agreement and the duration of the non solicitation agreement so it will come down to the scope of the agreement and the geographic scope and the time parameters associated with this and then of course it's the employers burden to argue that those parameters are reasonable and necessary on several occasions the Iowa Supreme Court has upheld 2-year non-solicitation agreements as reasonable much longer can become an issue because some of the former employees may argue you know that's a restraint on my trade and on my ability to earn a living and that sort of thing and so again the more we can justify why the restriction is necessary and appropriate the better off we will be having longer non-solicitation agreements so I mean it's better to have the non solicitation agreement in place rather than to have an issue arise where an employee starts to do this after the fact because you'll have less ability to try to protect your business so an example of this that was a case that rose to the Iowa Supreme Court had involved a pest exterminator who sent a customer a letter saying he left his employer and he in a competing business and probably you know lowered is rate and was hoping just to kind of take the client base and so this employer had a right the right contract in place to be able to protect itself and so this is an example where the Iowa Supreme Court enforced the non-solicitation agreement so now let's talk about non-competes so non-competes can be very valuable for your business but you have to keep in mind that just because you have one doesn't always mean it is enforceable so non-compete agreements are clauses and employment contracts that prohibit the employee from competing against the company and from starting their own business so sometimes non-solicitation agreements may be okay or you might agree to let an employee work for a competitor but you just don't want that individual to take any of your customers and clients and so that might that's the difference between the non solicitation and the non-compete the non-compete is you know you do not want them competing against your business in any way and so it's broader tha the non solicitation so again the test is reasonableness which depends on the facts and so courts look at the scope the gyah the geographical limitations and the time limitations so by scope it's you know what it what is the business that this particular employee is in and what is it that this particular employee does because if you have a non-compete agreement it affects that individuals ability to earn a living and so courts you know are very they scrutinize these agreements to make sure that there's other jobs or other occupations that the individual can do because you can't just prevent them from working entirely so when I draft these agreements I try to drill down with my clients to figure out you know what is it you're most concerned about and then even provide examples of other jobs or occupations that this individual can do that's not in violation of the non-compete agreement and if we set that out at the outset I find that helps us argue the reasonableness two other criterias are the geographic scope you know is this are we concerned about just Des Moines are we concerned about all of Iowa how big is the jurisdiction or the geographical parameters that were worried about you know being able to enforce that depends on your business and how your business operates and the harm that can result to your business and then of course the time you know are we concerned about six months are we concerned about two years we can put in your employment contract whatever time you want you know provided the employee will agree to it and sign it but just because we put in there five years doesn't necessarily mean that it is enforceable I'm gonna kind of jump along here so for here's some examples of the geography and how it depends on the circumstances a ten mile radius was reasonable for a Pest exterminator for a livestock veterinarian a two hundred and fifty-five are two hundred and fifty mile non-compete radius was reasonable and again courts will reduce the geographic and time limitations based on what they think is reasonable and so this is called the blue pencil doctrine and that's what we have in Iowa and what that means is the court may say well you wanted five years and you wanted 250 miles and I don't think that's reasonable I'm gonna make it six months and you know I'm gonna make it 25 miles from your business so that's called the blue pencil doctrine currently Iowa has that jump along here now there's been a trend across our country and primarily in some states about non-compete agreements and them being used for employees that maybe shouldn't be subject to a non-compete so for some fast-food chains and for Jimmy John's where we typically may have a variety of employees that are in the lower income bracket they have been subjected to non-compete and so there's been a lot of legislators and lobbyists and politicians that I've been very concerned about that because that prevents them from trying to better their life and earn a better quality of living and so there's been a lot of lawsuits over this and Jimmy John's is the famous one where they agreed to pay a hundred thousand dollars to the Illinois Attorney General in this case the Illinois Attorney General filed a lawsuit and sought a variety of different remedies one of them's called a declaratory judgment action which is basically saying court we want you to rule that their non-compete agreements with you know this classification of employees is unenforceable and it's invalid and then they also took it a step further and sought damages and one of their bases was the consumer fraud statute in Illinois that other states have to try to say that you know Jimmy John's really didn't have a legitimate interest here in protecting the minimum wage worker from not you know working on another fast-food you know restaurant in the same market and so it was detrimental and harmful so other states across the country I was not one of them have implemented laws to try to curtail non-compete agreements and when they can be used some of the legislation that's been proposed in other states is to only have this be an option when you're onboarding employees so that the employee will know up front if they're going to be subject to any restrictive covenants that's not required in Iowa employees do have to have what's called consideration they have to receive some value for giving up their rights to you know go compete or disclose certain information but you can enter into these agreements with your current employees and ongoing employment is sufficient but when we are trying to argue reasonableness and trying to enforce those agreements we'll have a better time doing so if we can explain that this particular employee truly does have access to the confidential information and truly can't harm your company and we can point to tangible value that they received in return whether that's lucrative compensation or you know certain things like that and so the more we can point to that the better off we'll be in trying to enforce it so and Jimmy John's non-compete they tried to prohibit employees from working for a competitor within three miles of the store for two years and the competitor was defined as any company that where 10% of its value is from sandwiches and again this resulted in the settlement for a hundred thousand dollars we talked about the blue pencil doctrine another area that lobbyists and some politicians are trying to have statutes on is called the red pencil doctrine and it's basically when employers overreach and try to you know just have these strong deterrent restrictive covenant contracts and say you know you can't work in our whole state for five years and make it really burdensome for an employee they're trying to say that courts when that happens don't enforce the contract at all so it it kind of encourages the employer to want to have agreements in place that are indeed reasonable Iowa has not gone to that extreme but of course you know sometimes employers just want the deterrent effect and we can rely on that blue pencil doctrine but other times we want to be able to argue that the non-compete agreement is reasonable and so there might be a motive to not have those be overly broad so here's an example of some of the states that have statutes and have tried to make it more difficult for employers to have overly broad restrictive covenants Illinois Massachusetts New York are a few examples and again Iowa is not yet one of them and they try to focus on the low wage earners and jobs that affect the public so now let's move on to the remedies for a non-compete so when you have an employee that leaves your company that is subject to one of these agreements what do you do next well when the employment relationship ends you should have a conversation with them and remind them of these contracts and document that you reminded them of this so that way if you have to call me or another attorney six months later we can show we reminded them and they knew that they were subject to these agreements and they can't say you know I forgot sort of thing and then we can send them a letter reminding them you know we have these agreements in place and we're going to enforce them a couple of different options we have that we suggest you put into your restrictive covenants and actually have as clauses in your contract if you want them are temporary or permanent injunctions so an injunction is saying court I need you to intervene and I need you to stop something so it's not necessarily think you know trying to get monetary damages but more so this employee just left coca-cola and they know our recipe and they're going you know to another company and they're gonna take it and so we would go to court and try to say court I need you to you know stop this before it happens or stop this individual from setting up his or her competing business because they're planning to do that injunctions are very high standards to meet we have to show that there is indeed a reparable harm that's going to result if you want that sort of remedy so how we you know draft the contract we'll try to touch on that so that we can argue to a court that we can meet that standard but that is difficult because courts will think you know if you can just get monetary compensation for what happened courts prefer to do that unless there really is a threat of irreparable harm we can also seek damages for example with that Pest exterminator case that we talked about earlier where the former employee contacted the customers and clients you know there's likely a loss of goodwill it was probably embarrassing for that company to have clients about it maybe some of the customers left to you know pay less and have this other individual do the work so we would have the burden to prove your damages but that's another remedy we can seek you can also seek what's called liquidated damages and that is when the employer and the employee agree upfront to the type of harm that might result if certain circumstances occur and so that's where you would agree to the dollar threshold for a violation and so that's an option that we can put into a contract and then another one is of course attorneys fees so if any of these restrictive covenants are violated you can have a clause in there so that the employee agrees upfront if there's you know if this agreement is violated I agree that the prevailing party can recover attorneys fees and so that can be a useful tool and a useful deterrent to try to protect your business so here are some of the takeaways for non-compete agreements be specific tailor it to your business and your particular needs don't use a generic form because that will be harder to enforce and think about you know what are the limitations that you need for your business in terms of the appropriate restrictions for these three restrictive covenants and the scope of these covenants and evaluate attorneys fees and you know remind employees preferably you know when you onboard them try to get these agreements in place when they you know leave your company bring them up and then also try to evaluate on an annual basis or at least you know every so often what your employees are doing because employees may stay with your company for a long time and you might need to you know re-enter or create new agreements depending on what know-how or information the individuals have acquired so those are really this is kind of a summary of the various options that you have available to protect your company and how are we doing on time okay so we have a few minutes for questions we're happy to answer any questions I will kind of let us both answer this question from my Roman prefer diamond writing because it shows you know the steps the company took and also if we haven't been writing for you know you might not need a non-compete agreement for every including their company it's really meant to be those high valued employees that really do have access to that information so that agreement is the best way to do it if you don't have the agreement there might be some trade secrets that can touch upon in Matt's world that we can use to try to protect your company but we're not going to be you know as efficient or have as much zealous advocacy to protect your business as we would like right that's right instead I you don't want to rely on and along the lines of the company culture that we touched on earlier we really need to think about you know what accents are beginning to employees at you know the whole array of fewer hierarchy within your business and then also use technology wisely if there's certain information that you need to protect to make sure we're only giving that information of certain information that we had adequate precautions in place to protect that so that is not only with the agreements with other ways that we you know as well organization and another example that I've seen through litigating these restrictive covenants is when in when employers have them with just anybody and everybody within their business what ends up happening is the employers don't enforce that all the time so with the Jimmy John's example when you have you know a little income worker that wants to go leave to be a manager at a fast-food restaurant you might not enforce it well in the world of employment the employer the business's pattern and practice can potentially be relevant to the issue that is being litigated and so that's again another we want to think about you know who are we getting access to this confidential information and then having the appropriate precautions in place so one of the things I knew is we might have not a disclosure or confidentiality agreements with a variety of employees but then only you're really valuable employees will be subject to the not compete and so that's one way to try to make a distinction between those employees that can really affect your business so it all depends on how you negotiate to the contract and then how the contract reads and so that's an example of it depends on how the contract is drafted and as you want it to only be recoverable for the business if we draft the contract that way and the employee agrees to it then you know finish possible only he will get the facts out of that bargain but it depends you know on how loose how these terms are negotiated and it also affects reasonableness because like the courts here with the Jimmy Jones example the sophistication of the parties and their knowledge you know can be taken in in terms of what is reasonable so if somebody is you know both parties the business and the employee have an attorney in their negotiating habit that we will probably use that as a factor to say this is reasonable they knew what they were doing then they'd agreed to it you know the flip side is if you have a really strong contract you have liquidated damages in their attorneys fees you make it just almost impossible for a low wage earner to go look for a better job then it's going to look like you're just trying to you know restrict them you're not really trying to protect you this that's the thing keeping my for the short the short version that negotiates things I'm thinking about these things up front for your onboarding people when you're setting out how your companies work back its attorneys are blessing you know your legal costs absolutely it depends on the company and that's why there's more and more laws you know trying to be written in a variety of states it's because some individuals feel like an employee doesn't have the state bargaining power that an employer does because you know the argument is in tough economic times put any restrictive covenant in front of an individual in order to sign it because they don't have another choice so that's why they're just um you know an effort you made to try to curtail these so you know yes an employee can negotiate with any employer but some employers may be open to negotiations and some employers may happy so it just depends and then you know after and implement leads the company negotiations can't continue because you know sometimes we'll negotiate the parameters of a non-compete to avoid a lawsuit and so negotiations get happen at any time but to negotiate both parties have to be willing to do so the employer and the former employee or prospective employee as a general rule of thumb the higher that's why so let's give them a hand round of applause figure out if you have a couple other questions maybe even wanted to ask offline as well they'll hang around for a little bit I do want to mention there's surveys on their tape although if you're watching in online no pin and try to survey you can complete those and give us other ideas for what you'd like more information on for next top 5 sessions that we create or planning 2018 and then just a couple we have I shouldn't even say a couple there's a bunch of small business stuff coming up to get you to your education so if you know something that is looking to start a business and exploring the different kinds of capital they might need Lawler vs. macro model room state programs we have an event on August 2nd it is limited to 20 people because there's a ton of information to get through and a half-day that is a registration is open our female entrepreneurship series is on August 3rd and our first Friday session will be out at the Iowa women's center and it's August 3rd is carrying rush will be sharing her journey on August 22nd we'll be back in here and we're talking technology top 5 apps that you should have for your business will be in here September 11th is a brand new event it's called creating a new revenue stream for your business it will focus on an e-commerce whether you are a retail storefront or even a service business how moving online for appointments for purchasing all of that we will actually have Google coming in to teach us a session on how to measure your online success and we have three level speakers talking on how they've sold just on Instagram all the way up to having multiple retail stores and their online store and then a lady actually in town will be speaking on how she's selling in over a thousand moo teks online and working with Zulily so all different success stories right here in your backyard and how they did it and then November night there's a flyer on your table that is our small business success summit Vegas Brown is actually one of our sponsors for that event we're expecting over 300 people to show up that event this year great content three great keynotes and 18 breakout sessions so get ready there's a lot coming this fall hopefully you can join us and thanks for coming today guys