North Carolina-based Epic Games filed a lawsuit over the alleged leak of secret information related to Fortnite Chapter 2. The company claims employee Ronald Sykes violated the terms of a non-disclosure agreement by sharing information related to the new game, including new game-play features and a virtual map of the fictional game universe, prior to its public release. The success of Epic Games’ claims will primarily hinge on whether the non-disclosure agreement is enforceable and whether the allegedly leaked information constituted protected trade secrets. Non-Disclosure Agreements A non-disclosure agreement (“NDA”) is a contract, or part of a contract, that prohibits one or more parties from disclosing certain confidential…
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Stormy Daniels and Uber: How Nondisclosure Agreements Affect Your Rights
Lately the term “non-disclosure agreements” (or “NDAs”) have inundated the news. These secretive agreements are now forefront in headlines about Stormy Daniels’ alleged affair with President Trump and Uber’s evolving corporate culture in response to claims of sexual harassment and discrimination. This has left many non-lawyers wondering: why do parties enter non-disclosure agreements and how do these agreements work? NDAs are contractual agreements designed to keep specified information confidential. Such agreements list and/or describe the information prohibited from disclosure and the punishment for disclosing such information, often, a large sum of money known as liquidated damages. Generally, parties are free to enter a non-disclosure agreement regarding any information, except that…
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The Purpose of Non-Disclosure Agreements and How They Could Fail Harvey Weinstein
What happens when you violate a non-disclosure agreement? Are there any circumstances in which is permissible to violate one without consequences? What are non-disclosure agreements even for? What does everyone have to hide? Non-disclosure agreements are a way for businesses or individuals to protect confidential information given to their employees or other parties. They can also be called “confidentiality agreements” or simply “NDAs.” At Lindley Law, all employees sign a confidentiality agreement with respect to client information. In addition to attorney-client confidentiality, it is important to the attorney-client relationship that we maintain confidentiality so as to not compromise or prejudice our clients in any way. Other companies, such…
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North Carolina Business Court: Employment Agreements Automatically Terminate Upon the Sale of a Company
A recent decision by the North Carolina Business Court held that an employment agreement automatically terminates upon the asset sale of one company to another, despite continued employment with the purchasing company.[1] In 2001, Andrew Lund executed an employment agreement with his then-employer, Southern Staircases of North Carolina, Inc. The agreement contained several post-employment restrictions regarding disclosing confidential information and soliciting current and future customers. The agreement also contained a duty of loyalty provision to “devote his entire working time, attention, and energies to the business of the Company and . . . [to] not be engaged in any other business…
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North Carolina Business Court Weighs in on Enforceability of Non-Compete and Confidentiality Agreements Post-Merger
It is well-settled law that adequate consideration is required to create binding restrictive covenants such as non-compete agreements. Generally, such agreements are entered at the start of an employment relationship, and the new employment itself constitutes consideration. In North Carolina, continued employment following a merger of two companies does not satisfy the consideration requirement. In a recent decision, the North Carolina Business Court (“NCBC”) confronted the very issue.[1] In January 2012, AmeriGas Propane, Inc., a propane company that services over two million residential and commercial customers nationwide, merged with Shaw L.P. Gas. Ermon Coffey, an employee of Shaw, and…
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Eastern District of North Carolina Predicts the North Carolina Supreme Court Will Apply the Doctrine of Inevitable Disclosure “Under Certain Circumstances.”
The Eastern District of North Carolina recently decided a case affirming that, while North Carolina courts have not yet adopted the doctrine of inevitable disclosure, North Carolina would adopt the doctrine under certain circumstances.[1] Spirax Sarco, Inc., (“Spirax”), alleged a claim for, among other things, injunctive relief under the doctrine of inevitable disclosure against one of its former employees. Spirax purported that defendant Bryan Johnson (“Johnson”) used his company issued laptop to download thousands of confidential computer files to personal devices without permission. Johnson resigned from Spirax on May 27, 2014 to work for SSI Engineering, Inc. (“SSI…
