Document Type

Article

Publication Date

2016

Case Synopsis

The Nevada Supreme Court held that non-compete agreements cannot extend further than what is reasonable and necessary to protect the interests of the employer and cannot create an undue hardship on the employee. It also held that courts may not “blue line” (“blue pencil”) contracts, that is change or delete terms to make the Contract legal. The Court further held that altering player contact information, so long as the information can be restored with minimal disruption to the gaming company does not rise to the level of conversion. Finally, the Court held that a gaming company is not liable for misappropriation of trade secrets under the Nevada Uniform Trade Secrets Act and is if it reasonably relies on representations presented by employees that information was based on prior relationships not possibly stolen information.

The dissent, while agreeing the non-compete was written too broadly, disagreed with the majority when it comes to blue lining contracts. Calling rules that disfavor blue lining antiquated, the dissent would like courts to have the freedom to modify contracts. The dissent also disagreed with the majority on the Uniform Trade Secret Act and would have held that the defendant had enough knowledge of a possible violation because it knew the non-compete agreement existed, and thus, was on notice that it might possess trade secrets.

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