Honest Abe's New York Business Law Blog

Chef's sue over intellectual property

2007-07-21T21:32:00.000-04:00

Non compete agreements protect employers from losing valuable trade secrets and employees. Recently, some chefs have been bringing lawsuits over protecting their recipes and restaurants. Some chefs, such as Homaro Canto, the ultra creative owner of Mato restaurant in Chicago, was recently quoted in the New York Times stating that he makes his cooks sign a nondisclosure agreement before they so much as boil water.

Recently, Rebecca Charles, of the New York restaurant Pearl's Oyster House has sued Ed's Lobster House located in Soho. EdMcFarland, chef and co-owner of Ed's Lobster House was Ms. Charles' sous-chef. Ms. Charles claims that Ed's Lobster House is a knock off.

It is my opinion that an increasing number of talented chef's will and should have their employee's sign nondisclosure agreements. For those who are planning on opening a truly unique restaurant, such as one that incorporates molecular gastronomy, ala Ferran Adria, should insist on it. However, if you are planning to open another penne ala vodka joint, you would be better off upgrating to San Marzano tomotoes.

Should start up companies use convertible debt?

2007-07-17T21:18:00.000-04:00

If you are planning to raise funds for your start up company, perhaps you should consider using convertible debt rather than stock. It works like this, investors receive a note that converts into common stock during the next round of financing at the rounds evaluation. At that stage, their contribution is treated as a loan that an entrepreneur can re-pay unilaterally.

Latest legal information from Entrepreneur magazine

2007-07-11T22:09:00.000-04:00

Entrepreneur magazine periodically posts basic legal information. On the website currently is an excellent article regarding non-compete agreements. There are a variety of reasons why a company should have a valid non-compete agreement, such as protecting trade secrets. This article articulates a variety a circumstances where a non-compete agreement may not be valid.

There was also an interesting front page article in the New York Times regarding non-compete agreements in the restaurant industry. Because I am an actual subscriber to the print edition, I don't have a link. Anyway a common problem in the restaurant industry occurs when an employee opens a similar restaurant to the mother restaurant in the same city. For example, a former employee of Peter Luger's opened Wolfgang's Steakhouse in New York City. Perhaps if the proprietors of Luger's had its employee's sign a limited non-compete agreement, they would have been able to prevent the opening of Wolfgang's. Unfortunately, the case law is unsettled on this issue.

Business Reading list

2007-07-11T22:01:00.000-04:00

My current business reading list:

1. Ryan and Jeffrey Eisenberg, "Waiting for your Cat to Bark"

2. Seth Gordin, "Small is the New Big"

3. Mary Buffett and David Clark, "The Tao of Warren Buffet"

4. Robert Sooble, "Naked Conversations"