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The two pillars of the fair use doctrine of the 1976Copyright Act
I.
Introduction
In some circumstances, the “fair use” doctrine acknowledges the right to allow the legal
use of other intellectual property or copyrighted works. It is one of the exceptions to the
Copyright Act of 1976 that can be used as a justification against an accusation of copyright
infringement. This exception allows certain persons or organizations, such as educational
institutions, to have the lawful ability to use or reproduce the copyrighted work for any
“transformative” purposes (recreation from original work), including criticism, news reporting,
comment, teaching, scholarship, and even research (Stim, 2019, para. 1). Although the term “fair
use” was well-introduced and defined in the Section 107 of the 1976 Copyright Act, it seems to
have a vague application in certain contexts. This vagueness allows for a great deal of flexibility,
but it also makes it difficult for the courts to determine who would be eligible for advantages
provided by the doctrine. This paper will examine how flexible the fair use doctrine is by delving
into how courts have evaluated and given final decisions on both “fair use” and “non-fair use”
lawsuits, such as Harper & Row v. Nation Enterprises, Google LLC v. Oracle America, Inc., and
Authors Guild, Inc. v. Google, Inc.; thereby, it contributes to the better understanding of
“transformative” use under the fair use doctrine.
II.
History of Fair Use Doctrine and Its Four Criteria
When deciding whether the particular lawsuit can be labeled as “fair use” or not, the court
must consider four primary criteria provided by Section 107 of the 1976 Copyright Act to guide
their judgment. According to the American Library Association, section 107 of the Copyright
Act of 1976 was amended to include the fair use doctrine after a series of precedent-setting court
rulings determined that some unauthorized copying practices were “fair uses.” As stated in the
U.S. The Copyright Office Fair Use Index, the first criterion to evaluate under Title 17 of the
U.S. Code is the “purpose and nature of the use,” which includes determining whether the use is
for non-commercial educational purposes or for commercial uses. Second, the court evaluates the
“nature of the copyrighted work” by reviewing the primary purpose of the original work’s owner.
Third, the “amount and substantiality of the portion used in relation to the whole” must be
considered. Lastly, the court must consider “the effect of the usage on the potential market” by
considering the financial damage of copyright infringement on the original work. As the fair use
doctrine is the exception to copyright infringement, the court must carefully conduct each case
on a case-by-case basis through all four criteria listed above to avoid wrongful judgments.
III.
Fair Use and Non-fair Use Cases Analysis
Numerous legal cases have been classified as fair use lawsuits regarding intellectual
property and copyrights. Reviewing differences in cases that the courts have decided is the most
effective way to gain a deeper understanding of the flexibility of fair use. This is because such
cases give the most specific illustrations of how each doctrine’s criteria has been used in various
circumstances. The first case is Authors Guild v. Google, Inc, 804 F.3d 202, which was
previously characterized as a fair use case (2d Cir. 2015). It has come to be known that Google
has scanned millions of books that were given by many libraries, who agreed with the
digitization of books, and made them searchable online via their service, which is known as
Google Books. (Stim, 2019, para. 37). This allows its customers to identify the words, keywords,
or phrases they wish to search on the internet so that they may find them quickly and for free
from the scanned materials. Furthermore, any libraries participating in the campaign have the
right to keep the online copies they provided to Google. Concerned that the process of scanning
books involves an infringement of the copyright and must be sued, some of the writers of those
digitalized books have chosen to file a lawsuit against Google and numerous other entities
associated with it. The court, on the other hand, agreed with the defendants and decided that the
reproduction of digital copies for internet search constituted an acceptable “fair use.” The judge
decided to base their decision on the criteria regarding the amount of work that can be legally
copied from a copyrighted work. They argued that since the Google database only enables users
to find terms involved in the digital volumes, they can only read some of the materials.
Therefore, limiting researchers to just the phrases or keywords they find would not lead to a
replacement that would impair the market for the original works. This case helps clarify what a
“transformative” use of the fair use doctrine is by showing what Google, Inc., had done with the
books borrowed from libraries. Indeed, Google solely transformed those books into online
versions in which the researchers would find it easier to find the words online, but limited to
access to the whole book. In other words, “transformative” use has given the world of technology
a new way to make books and other copyrighted works more accessible to people, as in this case,
but it did not replace or damage the original works financially.
However, there have been lawsuits in which the defendants were thought to be in a “fair
use” situation, yet their way of copying from the original works was actually copyright
infringement. The case of Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985), involves
the plaintiff, Harper & Row, suing the defendant, Nation Enterprises, for publishing extracts
from former President Gerald Ford’s unpublished autobiography. The release in The Nation
occurred before the day on which Mr. Ford’s book was scheduled to be published in Time
magazine, which had declined to pay the remaining $12,500 due to a violation of the contract.
This case was brought to court because The Nation’s replication substantially harmed Mr. Ford’s
serialized copyrights’ resale value (Stim, 2019). Based on the infringement of the fourth criterion
of fair use doctrine, which was a great deal of influence on the market potential of the
copyrighted work, the court ruled that this was a non-fair use suit. This lawsuit supports the
flexibility of the doctrine in terms of the amount of the portion reproduced in proportion to the
copyrighted material overall. Although the Nation magazine only copied a few words – precisely,
a 300 words extract from an unpublished work by Harper & Row – that publication replicated the
essential concepts – the “hearts” – of Gerald Ford’s bibliography, according to the BitLaw report.
Consequently, Harper & Row, as well as Time magazine, were adversely affected. Time
magazine had canceled its contract with Harper & Row and refused to pay them the agreed-upon
amount of money. This harmed both parties. Altogether, the fair use doctrine’s flexibility aided
the Supreme Court in reaching the proper judgment on who the doctrine should cover; hence,
this case is not fair use. The plaintiff was successful in obtaining fairness and is entitled to
compensation for economic losses inflicted by the defendant.
Some fair use cases require complicated considerations, which might help to have access
to the fair use doctrine from a variety of perspectives regarding the technology or software cases.
The Harvard Law Review (HLR) in 2021 reviewed the Google LLC v. Oracle America, Inc., 141
S.Ct. 1183 (2021), fair use case, which was heavily related to programming code. Apparently,
the flexible principle of fair use doctrine of the 1976 Copyright Act, at the time of the case, was
not able for the judge to entirely rely on the four crucial factors to determine whether the case
was fair use or not. The controversy between Google LLC, a defendant, and Oracle America, a
plaintiff, stemmed over the use of portions of the programming language called Java, which
Google copied “around 11,500 lines of code from the Java API” to assist Google programmers in
improving Android apps. Prior to the Supreme Court’s decision, majority justices expressed their
dissent on three of the four criteria that the judge held supported Google’s fair use as a matter of
law. As Justice Thomas argued, “the majority skipped over the copyrightability analysis, thereby
ignoring half the relevant statutory text and distort[ing] its fair-use analysis” (Harvard Law
Review, 2021). Overall, the Supreme Court still held that “Google’s copying of parts of the Java
application programming interface (API) in its creation of the Android programming platform
was fair use as a matter of law,” according to Harvard Law Review. To reach this decision, the
Court cannot only depend on their judgment by merely looking at the flexibility of the fair use
doctrine’s four criteria; they had to expand their view on the “transformativeness” in the fair use
analysis, however. The idea of “transformative” use must be expanded in this situation since it is
highly tied to technology and software development, both of which usually involve creativity.
Thus, it helped the court understand the importance of Google’s “reimplementation” of the Java
API in a new technological context.
By reviewing different fair use and non-fair use cases, it somewhat demonstrates that the
flexible principle of the fair use doctrine had effectively guided the Court’s judgment in carefully
determining through four factors that led to the conclusion on which parties would be protected
by this doctrine. In the Harper & Row v. Nation Enterprises case, for instance, the Nation
magazine only reproduced a few words, which based on the third factor, the volume of
copyrighted material copied, is still not extremely substantial and may consider fair use;
however, the information copied was the “heart” of the content and, thus, resulted in financial
damage for Harper & Row. More importantly, the findings of this paper also reflect the fact that
in some cases, such as Google LLC v. Oracle America, Inc., the flexibility of the fair use
doctrine is not perfectly adequate; instead, the idea of “transformative use” also needs to be taken
into consideration to resolve any cases that involve a great deal of creativity, such as those that
arise in the context of technology or software. However, by analyzing the Google case, an overreliance on “transformative” usage would result in “distorting of its fair-use analysis,” and this
may appear to become “virtually dispositive of fair-use findings,” as argued by the authors of the
Harvard Law Review case summary.
IV.
Conclusion
Although the flexible principle of fair use can be immensely beneficial for the court in
determining which parties need to be fined because of violations of copyright infringement and
which are considered fair use, this flexibility seems to be a not-so-good tool for the court to use
in the era of information technology. This is because innovation and creativity in the technology
era require the court to use the concept of “transformative” use of the fair use doctrine. It is
possible that there could wind up being the over-reliance on the “transformative” use of the
doctrine, which would then result in an unfair judgment being handed down to individuals who
have suffered from the other parties’ violations of copyright. Therefore, the four factors for
determining fair use cases must be modified to be more appropriate in the technological era. To
reach this goal, the technological developments and their impact on what may be copyrighted,
how works may be copied, and what constitutes an infringement must be addressed in great
detail and from all aspects, not primarily by examining its “transformative” use.
References
American Library Association. (n.d.). Fair use: What is Fair use? Retrieved November 20th,
2022 from
https://www.ala.org/ala/washoff/WOissues/copyrightb/copyrightarticle/whatfairuse.htm
ARL editors. (n.d.). Copyright timeline: A history of copyright in the United States. Association
of Research Libraries. Retrieved November 17th, 2022 from
Copyright Timeline: A History of Copyright in the United States
Tysver, D. A. (n.d.). Importance of copyright decisions. Forsgren Fisher. Retrieved November
16th, 2022 from https://www.bitlaw.com/source/cases/copyright/index.html
HLR editors. (2021, November 10). Copyright act of 1976: Google LLC v. Oracle America,
Inc., Leading case: 141 S. Ct. 1183 (2021). Harvard Law Review, 35(43), 431-440.
Retrieved November 17th, 2022 from https://harvardlawreview.org/2021/11/google-llcv-oracle-america-inc/
Stim, R. (2019, October 11). Summaries of fair use cases. The Board of Trustees of the Leland
Stanford Junior University. Retrieved November 15th, 2022 from
Stim, R. (2019, October 01). What is fair use? The Board of Trustees of the Leland Stanford
Junior University. Retrieved November 17th, 2022 from
Assignment: Legal Research Paper
Length and Format: 8-10 pp, double-spaced, 11 or 12-pt font in Arial or Times New Roman.
Approximately 2000-2500 words (excluding references)
Real-Life Audience: The law does not exist in a world of legal abstraction. Rather, I want you to
appreciate that the law is a tool for actual ethical application to our lives. For this reason, I
want you to create a scenario where your research and recommendations serve to advise
your firm on your chosen issue. A business scenario is a description of either a real or
hypothetical company. Business scenarios are a combination of people, events and factors that
describe the current business situation. For your chosen scenario, you might be the General
Counsel writing a memo to the V.P of Human Resources or to the owner of the business
advising them on applicable case law and next steps. Your business scenario should include the
possible legal threats and challenges for the company. Here’s an example: Bill is the owner of
First Flight Furnishings, Inc., a small, closely held corporation in the state of Texas. Samir, a key
employee, just left. Samir was intimately involved in a major transaction and knows all the
secrets of a $40 million deal that hasn’t yet been finalized. To make matters worse, he is going
to a competitor in California. Bill had Samir sign a non-compete contract before he started
working at First Flight that says employees cannot work for a competitor for six months after
they leave, but another employee, Kate, left last year for a different competitor and Bill didn’t
pursue it. What should Bill do now?
Purpose: Your purpose is to provide practical legal advice to solve a business problem in a way
that also furthers the business objectives of the firm. For example, your memo should explain
the law and help the decision-makers to balance both risks and business objectives. (e.g., If you
draft a covenant not to compete that is too broad, it might dissuade employees from leaving and
competing with the firm. But if it is ruled to be overly broad, it may be struck down and the firm
will be unprotected from outside competition.) Your memorandum should not be a Wikipedia-like
treatment of the topic, full of history and dry description, but should instead reflect your
individualized research crafted around the audience whose legal problem you are solving. You
should explain the topic, discuss the pros and cons of an approach to it, and then make a
well-supported argument that favors a particular approach or action.
Requirements: Your memorandum should include a description of the relevant case law and at
least one court case that would apply to the situation. Consider the context of the audience to
whom this memo is written. How would your explanation of the law be helpful strategically to the
person drafting the contract?
Your paper must include at least 5 sources, which could be statutes, cases, law review articles,
or general periodicals (Washington Post, New York Times, Wall Street Journal or similar). No
more than two of your five sources can be from these general, or popular press, periodicals.
Copying and pasting or incorrectly paraphrasing of others’ work will be viewed as an
intellectual integrity violation and will be closely scrutinized. The paper will go through
Turnitin to check for originality and integrity issues.
1
ACCT 245 Paper
Rubric
What This Report
Requires
Feedback to Improve Your Draft
Creates a scenario in which
your research and recommendations
advise a hypothetical client on a
chosen legal issue. Clearly identifies
the relevant law that applies in the
scenario you’ve identified.
For this assignment, you’re supposed to create your
own hypothetical scenario, not use the one that was
provided for you in the prompt as an example. You’ve
done a lot of work here, but you need to change the
facts of the case – new names, slightly different
perspective – so that you can showcase what you’ve
learned about non-compete clauses.
Explains the law, analyzing
the pros and cons to the approach
you suggest.
Offers practical legal advice
to solve a business problem in a
way that also furthers the business
objectives of the company.
You do a very nice job explaining the pros and cons
of your different approaches.
You do a god job offering practical advice to solve a
legal issue. I believe it would be beneficial to explain
more information about the cases you discuss such as
the Kate case.
Writing
Effectiveness
Writing should use a clear and
Overall the writing is concise and
professional tone with concise professional, however, there were certain places in
language to analyze complex ideas the essay where I was a bit confused as to what point
for the audience. The paper should be you were trying to convey.
well-organized and easy-to-read with
clear subheadings to signal the
Bottom Line on Top to the reader.
The length of the body of the
The length of the paper is slightly over
paper should be 8-10 pages, double guidelines. I did not notice grammar mistakes,
spaced, 11 or 12 pt font; grammar and although there were a few places with multiple
punctuation errors must be few and spaces. Grammarly is a great tool to catch any easy to
cannot detract from effectiveness.
miss errors.
2
The paper and “References”
Good work using reputable sources and
list should be correctly formatted. properly citing them. If you ever have confusion with
APA suggested but not required. At APA citation, I recommend the Purdue OWL APA
least five high-quality sources are style guide.
required.
Additional suggestions to improve this draft:
Thanks for the opportunity to read your writing and review your paper.
We’d love to keep the conversation going and encourage you to schedule an inperson appointment at this link. Please also review the Kogod Style Guide for
Writing, Research & Public Speaking for tips and tricks on business writing.
Finally, you can enroll in our Canvas course for 24/7 access to our Tip Sheets,
videos, LinkedIn Learning collections and more. Wishing you all the best, The
Center for Professionalism and Business Communications
3
Summary:
The business problem at hand revolves around the departure of the CEO and the
potential violation of the non-compete agreement he signed. This poses a significant legal issue
Commented [SW1]: Use specific nouns for the subjects of
sentences. This what?
for the company as it seeks to protect its intellectual property and prevent the CEO from joining
a direct competitor. The recommendation for a remedy or policy is to opt for selective
enforcement of the non-compete agreement, ensuring clear justifications are provided for each
case. This approach allows for adaptability while still safeguarding the company’s interests. It
is crucial to establish a consistent policy of enforcement, regularly review and update noncompete agreements, and tailor geographic limitations to enhance enforceability. By following
these recommendations, the company can navigate the legal challenges
effectively and minimize potential liabilities.
Introduction
The objective of this memorandum is to respond to the immediate legal problems that
arose as a result of the departure of Samir, the CEO of First Flight Furnishings, Inc. Particularly,
the non-compete agreement that Samir signed is now the pivotal legal issue facing us. A major
deal, encompassing it as one of the primary parties, the departure of Samir entails crucial legal
issues for the company. The main purpose of this memo is to deliver clear legal advice that
demystifies the complex circumstances of the current situation while matching the general
Commented [SQ2]: Nice work explaining the legal issue
in your scenario; however, I am a bit confused by the
phrasing of this sentence and I wonder if you can brainstorm
other ways to say this?
business objectives of First Flight Furnishings, Inc.
The leaving, and in particular the leaving of a central employee who has been deeply
involved in an especially significant transaction, is by itself a source of multiple legal concerns
that have to be decided by the court. On this matter, the non-compete provision is a very vital
aspect, and it could be beneficial or detrimental. This memorandum targets offering the
Company legal advice that is insightful, reduces risks, and enhances probabilities by being a
Commented [SQ3]: This is an interesting point – I wonder
if you would be able to expand upon how it can be
detrimental.
4
guide, therefore achieving the company’s goals. It aims to present a strategic document that
combines the legal aspect as well as the business outlook, forming the broadest information on
non-competition agreements from Samir’s point of view.
Background
The exit of Samir, who was a team player critical to the $40 million deal, is like a final
nail in the coffin for First Flight Furnishings, Inc., in the context. Samir is the key player in the
big deal, which adds to the complexity, but he may induce even more problems by joining a
Commented [SQ4]: I am a little confused as to what deal
you are discussing?
direct competitor in California. This situation turns out to be precisely excessive because Samir
has signed a non-compete agreement that clearly indicates that he is not allowed to cooperate
with a rival during the six months after he has left the firm.
The non-compete contract, the tool mainly handled to safeguard the organization’s
intellectual facilities, has a new significant meaning as Samir proceeds to work for a rival
company (van Caenegem, 2021). The temporal character of the agreement is another point. In
particular, it is concerned with a 6-month restriction trademark ownership transition period,
presenting the company’s intention to protect its business interests during the time-critical postdeparture period. The complexity of the situation arises when a precedent occurs – the company
did not require that a previous employee, Adam, should be forced to abide by a non-compete
agreement two years ago when he made a similar career move to another
competitor.
It must be said that the imbalance in the application of non-compete agreements puts an
additional layer of legal and strategic indistinctness on First Flight Furnishings, Inc. Samir’s
case and Kate’s departure example make one imagine the slow enforcement of those agreements
and changes in legal status of the company in the light of Samir’s quitting. In the subsequent
Commented [SQ5]: You’ve done a great job explaining the
situation and why non-complete contracts are important – I
think it may be good to expand on the specifics of a noncompete agreement and what is means.
5
sections, the legal complexities and the possible problems will be discussed, and
recommendations for practical implementation will be made.
Case: Edwards v. Arthur Andersen LLP (2008)
Commented [SW6]: How to Cite Court Cases Tip Sheet
In that instance, Arthur Andersen, a professional services company, required its
employees, including an accountant called Raymond Edwards, to sign a non-compete contract.
The agreement barred the employees from working for competing firms after leaving Arthur
Andersen.
The California Supreme Court decided on the enforceability of non-compete
agreements and emphasized that the reasonableness shouldn’t be ignored (Anderson, 2022).
The court ruled that non-compete agreements are generally void in California unless they meet
the criteria under the statutory exceptions. Such a decision supported California’s vigorous
public policies that contributed to the development of the movement of employees from one
company to another and to the “right to work for a competitor.”
Commented [SQ7]: Nice work discussing a relevant case.
I think it would be made stronger by going into detail about
what the statutory exceptions entail
The court stated that the restrictions on the former employees should be reasonable in
scope so as to protect the legitimate business interests of the employer without infringing on
the employee’s right to earn a living. The Edwards case demonstrates the importance of
balancing employers’ and employees’ interests while drafting and implementing non-compete
agreements in California.
Relevance to First Flight Furnishings, Inc.:
The Edwards case can be taken as a relevant precedent for First Flight Furnishings, Inc.
The court’s emphasis on reasonableness is parallel with the suggestion to check and revise the
non-compete agreements, ensuring that the provisions are not unduly broad. Based on the
provided requirements by Edwards, it becomes easy for the company to strengthen its position
Commented [SQ8]: This is a nice statement of the
importance of the court’s decision.
6
as well as to increase the chances of enforceability without violating the rights of the
employees.
Applicable Case Law
The legal parameters of Samir’s non-compete contract are an unclear issue that merits
analysis. “Edwards v. Arthur Andersen LLP”, which is an important case study that gives some
of the parameters affecting the enforceability of such contracts, is the one that occurred in
California (2008) (Barnet & Sichelman, 2020). This case marked a landmark testament of
significance placed on reasonability in non-competition agreements, to the point where it
established legal precedent that such agreements could only be enforceable if they comply with
local or national statutory exceptions.
Pros and Cons of Approaches:
A. Strict Enforcement of Non-compete Agreements:
Pros:
1. Protecting Proprietary Information: Tight administration prevents Samir, who is
deeply familiar with the significant deals, from being a threat to the company’s
confidential information from the competitor companies right away.
2. 2. Setting a Precedent: setting the right tone for the organization is one of the most
important cohesive and deliberate ways to manage the non-compete agreements, and
all the employees in the organization are aware of the importance of the agreements and
will try to avoid their breaches.
Cons:
1.
Potential Legal Challenges: With slight clarifications by the courts, the
enforcement may create legal challenges, especially if the non-compete contract is
deemed to be overly restraining or irrational.
Commented [SQ9]: This is a good case to include!
However, it may be beneficial to explain it a bit more.
7
2.
Employee
Morale
and
Recruitment
Challenges:
Forceful
implementation may drive employees’ confidence down, and the recruitment team
may face a hard time finding new appointments owing to perceived inflexibility. B.
Selective Enforcement with Clear Justification:
Pros:
1.
Flexibility: This approach selectively permits the company to look at the
peculiar setting of the given worker’s exit each time, which shows the company’s
flexibility in enforcing non-compete agreements.
2.
Mitigating Legal Risks: Selective Enforcement, together with the justified
specification, serves to confront legal risks and consider each individual case on its
merits, thereby possibly avoiding accusations of arbitrariness.
Cons:
1. Internal Perceptions: Selective Enforcement might lead to internal perceptions of
inconsistency and favoritism, potentially affecting employee morale and cohesion.
2. Legal Ambiguity: A selective approach could introduce legal ambiguity, making itN
challenging to establish a firm legal standing in cases where enforcement is
challenged.
Commented [SQ10]: Great work in this section explaining
the pros and cons of different approaches!
Well-Supported Argument:
Commented [SW11]: Poor title for a subheading. What
should the reader take away from reading this section?
Due to the intricacies of the problem, First Flight Furnishings, Inc. should opt for
intuitive enforcement while having sound explanations. The latter approach rests upon the fact
that each employee must be treated as an individual with circumstances specific to his or her
case in mind, with the level of employee’s participation, the nature of the business and the
potential damage to the company’s legitimate interests being taken into consideration.
8
The use of a thoughtful strategy by the company that embraces selectivity can serve the
purpose of having the business demonstrate adaptability while minimizing legal liabilities
(Trevino & Nelson, 2021). Detailed documents with explanations of the motives for selective
enforcement will comprise the robust basis for a procedural defense in the case of legal
disputes. Meanwhile, it upholds the limited obligations of the company under non-compete
agreements without onlookers’ impression of unfairness and strictness, ensuring an equilibrium
between the protection of proprietary interests and job security.
Legal Threats and Challenges
A.
In view of the complexity of the situation, a thoughtful policy could involve First Flight
Furnishings, Inc., considering the explanation of selective enforcement, which focuses on the
unequal enforcement of the policies to different employees. In the case of First Flight
Furnishings, Inc., the failure to enforce the non-competition agreement with Kate, who is a
previous employee working with a rival firm, is a problem. The court may treat the selective
enforcement as a decision based on discretion and hence put the company into difficulties while
it is attempting to get Samir into the agreement’s enforcement.
The court interprets selective enforcement as an indication that the company does not
consider the restrictions to be important to defend legitimate business interests. To reduce this
risk, First Flight Furnishings, Inc. should audit the circumstances and reasons for Kate’s
departure and determine the legitimacy of not enforcing the agreement. This should be done
immediately and consistently in a transparent manner.
B.
Reasonableness of Restrictions: Judges are used to examine the reasonableness of non-
compete agreements to accomplish a fair balance between safeguarding the right of the
employer, on one hand, and not choking off the employee’s living on the other hand (Adesina-
Commented [SQ12]: I am a bit confused by the inclusion
of ‘Kate’ into this discussion, since she was not mentioned in
the introduction. It may be beneficial to include her earlier if
she will be apart of the discussion.
9
Babalogbon et al., 2020). In the context of the Term sheet of Samir’s non-compete agreement,
it is essential to assess both the reach and the duration of the limitations.
If the limitations are too indefinite so as to comprise a substantial number of activities
alongside
an
overly
extended
span
of
time,
then they
might be considered
unenforceable. First Flight Furnishings Inc., therefore, should examine the conditions of the
Commented [SQ13]: I wonder if it would be beneficial to
discuss examples of what limitations may be overextensions?
non-compete contract and adjust them to be more accurate and precise. This may emphasize
the prohibited activities being only those directly linked to the deal. Samir was involved in the
$40 million deal and has the time period to be in accordance with the industry norms and nature
of the business.
C.
Geographic Limitations: Since Samir is joining the competitor in California, the
geographical issues related to the non-compete agreement should be addressed very
thoroughly. Agreements that have far-reaching geographic restrictions, such as covering entire
states or regions, may meet challenges in court. Courts, as a rule, determine whether the
geographical scope will deprive the employer of legitimate interests.
In order to tackle this obstacle, First Flight Furnishings, Inc. could determine similar
limitations according to the real competitive environment. This means pointing out the areas
where the company conducts its business and in which Samir’s knowledge is relevant for the
$40 deal. In this manner, the company would be able to increase the possibility of such
limitations being seen as reasonable and necessary for the protection of its business interests.
Recommendations
Consistent Enforcement: In the context of making Samir’s non-compete agreement more
enforceable for First Flight Furnishings, Inc., it is necessary to have a consistent policy of
enforcement throughout all employees. Inconsistencies, like the Kate case, where the
Commented [SQ14]: This is a great consideration to
mention, however, I think it would be more impactful if you
explained the specifics in more detail.
10
agreement was not followed, are seen by the courts as arbitrary and may weaken the company’s
case.
In the first place, one needs to take a closer look at the conditions under which Kate
left. If there were any circumstances that would have made the agreement not to be enforced
justifiably, these should be documented, and if necessary, the services of lawyers would be
sought to find the appropriate option. The policy will not only reinforce the company’s position
by demonstrating clear regulatory compliance against Samir but also avoid a vulnerable
Commented [SQ15]: This could be a very productive
discussion, however, I am unsure as to what Kate’s situation
was.
position in the courtroom in case of future legal challenges.
Review and Update Non-compete Agreements: For the matter of checking restrictions’
reasonableness, a wide review of already signed non-compete agreements is
recommended. The assessment should evaluate the extent and duration of the limitations to
ensure that defined standards of law are met, as well as whether the balance between the
interests of the company and the rights of employees is adequate.
The process of reviewing should encompass legal counsel’s involvement in order to gain
a better understanding of the industry standards and legal precedents. If better adjustments are
needed on the non-compete agreements (Aydinliyim, 2022), then amendments must be made
to make them more accurately applicable to the business operations of the company. This might
look in considering what activities a worker is prohibited from in relation to their role or the
duties they perform. Agreements must be reasonable and in compliance with applicable laws
to increase their enforceability and the aggrieved being able to successfully challenge them.
Geographic Tailoring: There is a need to give Samir’s move to the competitor located in
California detailed attention to geographic limitations when drafting non-compete agreements.
Restrictions by mere geographics or too much extent of geographic area may suffer challenges
Commented [SQ16]: I wonder what activities might be
relevant to this company’s activities?
11
in court (Walenta, 2020). Thus, First Flight Furnishings Inc. should reassess the geographic
limitations of its non-competition agreements.
The revised gravitates to the localization of the business and geographic limitations to
the areas where the company conducts its business and where Samir’s knowledge is applicable.
Consequently, this precision method not only enhances the chances of approval by the court
but also speaks of a reasonable and necessary action line to prevent the company’s interests
from being harmed. Legal representation must be included as part of this process in order to
create agreements that will obtain a correct distribution of interests and comply with the
existing legal standards.
References
Adesina-Babalogbon, O., & Abibu, A. (2020). PRESERVATION OF TRADE SECRETS AND NONCOMPETE AGREEMENTS: THE ELEMENT OF REASONABLENESS AND CONSEQUENT
ENFORCEABILITY.
Anderson, B. P. (2022). A Little Dictum Is a Dangerous Thing: The Post Pandemic Need to
Bust the Myth of a So-Called” Trade Secret” Exception to California’s Statutory Ban
on Non-Competition Agreements. Santa Clara L. Rev., 62, 245.
Aydinliyim, L. E. (2022). The case for ethical non-compete agreements: Executives versus
sandwich-makers. Journal of business ethics, 175(3), 651-668.
Barnet, J. M., & Sichelman, T. (2020). The case for non-competes. The University of Chicago
Law Review, 87(4), 953-1050.
Trevino, L. K., & Nelson, K. A. (2021). Managing business ethics: Straight talk about how to
do it right. John Wiley & Sons.
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van Caenegem, W. (2021). 13. Knowledge mobility, trade secrets and non-competes: lessons
from the common law tradition. Research Handbook on Intellectual Property and
Employment Law, 361.
Walenta, J. (2020). Courtroom ethnography: Researching the intersection of law, space, and
everyday practices. The Professional Geographer, 72(1), 131-138.
