Virginia Non-Compete Law Blog

Is the Michigan Basketball Playbook a Trade Secret?

Rob Dean — Fri, 18 May 2012 15:26:41 +0000

If you leave the Michigan basketball program, you have to leave the Big Ten altogether.

That’s what coach John Beilein recently said about his team’s player transfer policy:

“Our general rule is if there is a compelling reason that you want to attend one of those (restricted) schools, we will talk. But the policy is we don’t want a young man to take our playbook and go to the next school. It just doesn’t make sense.”

The transfer policy raises interesting non-compete and trade secret questions.

Does a team have a legitimate competitive interest in preventing a role player from transferring to a perennial basement-dweller in its own league?

The team transfer policy is similar to a Virginia non-compete agreement that prohibits players from joining a competitor in a particular location (Big Ten) for a particular time period (two years).

Under Virginia law, a covenant restricting competition is unenforceable unless it “is narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against public policy.” Omniplex World Servs. Corp. v. US Investigations Servs., Inc., 270 Va. 246, 249, 618 S.E.2d 340, 342 (2005).

The Supreme Court of Virginia has held that a “sweeping prohibition” that bears no relationship to prohibiting actual business activity that the employee provided to his former employer is overbroad and void as a matter of public policy. Home Paramount v. Shaffer, Record No. 10183 (Va. Sup. Ct. November 24, 2011).

If Michigan’s transfer policy were a Virginia contract, it would be unenforceable because the team no legitimate interest in preventing a role player -whose basketball talents, like mine, are relatively lacking – from joining a Big Ten competitor where he is unlikely to contribute much to the box score.

How would the aggrieved player challenge the policy? Either violate it and defend a lawsuit on the merits; or, seek a judicial resolution through a declaratory action before transferring.

Does a playbook constitute a trade secret, such that a player can be barred from attending the school of his choice?

A team playbook is probably a trade secret, as it is material non-public information.

But even if a player left with a set of offensive and defensive schemes, Michigan would be unlikely to prove damages. Consider the relatively minimal value of proprietary plays to a team’s win-loss total, even Coach Beilein’s vaulted 1-3-1 defense. Once the ball goes up, as another Michigan coach Bo Schembechler used to say, teamwork and willpower trump X’s and O’s. A lawsuit for a misappropriated playbook is likely meritless.

There are practical considerations, too.

As an unwavering supporter of Michigan basketball – last year’s loss to the University of Virginia notwithstanding – it’s puzzling why the program would restrict player movement in this era of one-and-done recruiting.

It also sends the wrong message to student-athletes, who may have legitimate reasons to leave a school for academic and personal reasons.

Schools such as the University of Michigan should follow the lead of the top tech companies in Silicon Valley, where non-compete contracts are essentially void. Talented people – whether basketball players or software engineers – will seek organizations that promote their professional growth, not restrict it.

That said, Go Blue!

Podcast: Top 10 Employee Mistakes That Lead to Litigation

Lauren Ellerman — Mon, 07 May 2012 18:52:15 +0000

I am not Jay Leno or David Letterman. I am much younger and shorter than either of those guys. But I like top 10 lists and want to help Virginia employees with avoiding expensive litigation.

Here is the podcast edition of the Top 10 Employee Mistakes That Lead to Litigation, including (1) email blunders, (2) social networking no-no’s, (3) thumb drive downloads, (4) cocktail conversations, and more.

If any of these issues sound familiar, it may be a good idea to contact us. We help employees address concerns at the workplace, review the applicable documents, and if necessary, defend against any lawsuits.

Please feel free to give us a call at (540) 985-0098 to discuss your employment case. We help doctors, investment advisors, and other business professionals with non-compete agreements throughout Virginia.

How to Beat Your Virginia Non-Compete for Lawyers

Lauren Ellerman — Thu, 03 May 2012 13:54:19 +0000

Now available for employees – and attorneys – we are offering a 60-minute online seminar, “How to Beat Your Virginia Non-Compete.”

Our goal is to help employees and attorneys better understand their workplace rights under Virginia law. Topics include how to avoid a lawsuit, ensure a smooth transition to a new job, and do so while preserving reputation and good will.

The class is available on-demand. Credit is available for continuing legal education (CLE) and participants may register through the website.

From the course description:

In Virginia, non-competition agreements are governed by common law principles and are unenforceable if not limited to protect a legitimate business interest. Join Virginia attorney Lauren Ellerman as she discusses the ins and outs of these complex agreements, and provide viewers with tips and tactics for beating Virginia non-compete contracts. The presenter will furnish practical advice on various scenarios, such as when a client receives a cease and desist letter, or when a client has been sued for allegedly violating a non-compete agreement.

We will also discuss for negotiation, declaratory judgment actions, defending an employee in litigation, resolving trade secret disputes, and more.