My Employee Violated a Non-Compete Agreement: What Now?

  1. Non-Compete Agreements
  2. My Employee Violated a Non-Compete Agreement: What Now?
Non-compete agreement violation

A non-compete agreement is a contract between two parties in which one commits not to compete with the other in the same profession or industry. Most states have laws requiring businesses to incorporate reasonable limitations in their contracts, such as scope, duration, and geographic restrictions.

If an employee leaves and starts working for a competitor in violation of a non-compete, you may be wondering if you can do anything about it.

Make sure your non-compete agreement is solid

One of the most important first steps you can take as an employer before you waste resources pursuing an employee is to have an attorney review the terms of the non-compete to determine whether it is legally enforceable. Often, there are a variety of defenses to the non-compete’s enforcement. Once these are detailed by the lawyer in response to the cease and desist letter, the matter can be resolved or dismissed altogether, and the company never follows up on its threat to file a suit over the non-compete.

You can try to get an injunction to stop the employee from continuing to act in a way that is against the agreement, or you can sue for monetary damages if your company has incurred financial losses due to the employee’s actions.

Remain vigilant and be proactive

It may be that your employee has not read the contract they signed in what most cases were the very beginning of their employment. Therefore, employers must remain vigilant and proactive by following best practices, such as an exit interview. When you conduct an exit interview, you will have the opportunity to discuss the employee’s obligations regarding the non-compete agreement. When this discussion occurs, you will get a better sense of the employee’s willingness to comply with the agreement. Take steps to protect the business by keeping meeting minutes and documenting the employee’s attitude towards the agreement.

When an employee has violated their agreement, it’s important for you as the employer to preserve evidence on their work computer. With hacking and data breaches becoming more prevalent, employers are taking cybersecurity more seriously. You may be one of these employers and have a service on every employee’s computer that monitors internet usage and records actions taken during those interactions. If this is the case, the employee’s computer may contain evidence of their intention to violate their non-compete agreement. If you have software that tracks employee internet usage, limit other employee usage on the same device to avoid compromising the evidence.

Consider communicating with the new employer

Another important way to mitigate the damage a violation can cause your business is to contact the employer. This is an important step for two reasons. First, likely, the new employer isn’t aware of the non-compete agreement’s existence. By contacting the new employer, you are allowing them to assess whether they are participating in work activity that would violate the non-compete. Secondly, by making the new employer aware of the non-compete, you are also putting them on notice that legal action may be taken if the employee is violating the agreement and the new employment relationship continues despite it.

Employment Lawyers are Ready to Help

Demand letters, pre-suit litigation, lawsuits, and injunctions are all possible approaches by a non-compete lawyer. In addition, a non-compete lawyer should consider issues such as confidentiality, counterclaims, and related claims– whether enforcing or defending a non-compete agreement.

The Crone Law non-compete attorneys regularly draft non-compete agreements and litigate non-compete actions. If you’re an employer looking to arm yourself against unfair competition and need an experienced employment law attorney in Memphis, TN; St. Louis, MO, or surrounding counties, contact The Crone Law Firm by filling out our client form or by calling (901) 737-7740.

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