Trade Secret Protection Terms in Rep Agreements

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This is the second of two articles covering the subjects of restraint of trade and trade secrets. This article examines trade secret protection.

Yet another potential hurdle in the rep’s efforts to avoid or limit the principal’s desire to restrain post-termination competition arises in the form of the need to protect trade secrets, which is recognized in some manner by every state. Most states have adopted statutes that are based on the Uniform Trade Secrets Act (UTSA), and as of 2016 there is a new federal Defense of Trade Secrets Act, so there are some common features of trade secrets … Read the rest

Limiting the Risks of Restraint of Trade and Trade Secret Protection Terms in Rep Agreements

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This is the first of two articles covering the subjects of restraint of trade and trade secrets. The second part, which will appear in the November issue of Agency Sales, examines trade secret protection.

“Legally Speaking” articles in Agency Sales magazine have often emphasized the importance of carefully crafting the terms of independent sales representatives’ contracts with principals to avert any number of potential problems. Where possible, reps should use their own terms of agreement. But realistically, principals often want to impose their own terms. Reps naturally focus on the commission terms, territory, and exceptions such as house accounts … Read the rest

Prove It! Why Reps and Principals Need to Keep the Evidence

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“Oh yeah? Prove it!” Among schoolyard taunts, that one has a germ of truth. If you can’t prove you’re right, you probably won’t win. If you probably won’t win, there’s usually little sense in starting the fight — you’ll waste your time and money.

So if you’re an independent representative or a principal in a fight, how do you prove you’re right? Evidence. For lawyers, evidence is ammunition — if we have enough of the right kinds of evidence, we can win the battle for you. And if the other side understands that you have the evidence, a reasonable settlement … Read the rest