What to do if an Employee Breaches a Non-Compete Agreement
More and more companies are asking newly hired and long-standing employees at all levels of their organization to sign a non-compete agreement. These agreements are designed to protect the organization’s competitive edge and keep former employees from either sharing trade secrets or pursuing former the business’ existing customers. The strength of a non-compete agreement is seen after an employee leaves the organization If an employer finds that the employee has been hired by a competitor, is starting their own business in the same industry or is trying to persuade customers to follow them away from the business, that is where protective action begins.
If an employer finds that a departed employee has breached a non-compete agreement, the steps to be taken will depend upon the specific situation. If the agreement refused the employee the right to take a job with a competitor organization, an attorney can send the competitor a copy of the agreement along with a cease and desist order, alerting them to the fact that the employee is contractually prevented from working for them. Likewise, if the former employee has decided to start their own business or to try to retain clients, the cease and desist letter can be sent to the former employee himself, and clients can be notified that the employee is acting against the terms of their employment contract.
If a cease and desist letter from a business attorney does not evoke an immediate and appropriate response, the next step will depend upon the terms set out in the non-compete agreement itself. If the contract requires that the matter be moved to mediation, then the parties can move to alternative dispute resolution for arbitration or negotiation. This process has many advantages, including avoiding the expense of court and potential revelations of trade secrets. If negotiation is not possible, then the only answer may be to pursue the issue in court. A business attorney can help the former employer to establish the specific damages that the business has suffered as a result of the breach of contract, as well as the appropriate remedies to seek in court.
Whether you are an employer who needs help crafting a strong and fair non-compete agreement for use in the future or an employer dealing with a departed employee’s breach of a non-compete agreement, we can help. Contact us today to set up an appointment to discuss your situation.