Attorneys Stephen Korshak and Lee Karina Dani

What if a former employee violates a non-compete agreement?

On Behalf of | Dec 15, 2021 | Business Law |

When you ask employees to sign non-compete agreements, you’re simply trying to protect your company. You’re well aware that an employee is going to have access to a lot of information, from records of past clients to proprietary information about how you do business. It could seriously harm your company if they take that information and leave to start their own business.

In some cases, non-compete agreements will even ask employees not to work for rival businesses in the same area. Once again, you don’t want your employees to just poach your information and then go to the competition. You also don’t want to be seen as a training center where people come to learn the ropes and then start another company to try to take your business. In this sense, a non-disclosure agreement may not go far enough, and then a non-compete agreement is needed.

But what if you have an employee who signed the document and then refuses to abide by it? What can you do?

The importance of a comprehensive contract

It’s essential, at a time like this, to have a comprehensive contract that lays out exactly what the employee can and cannot do. You also need to make sure that they signed it and dated it at the time so that everything is official. Employees will sometimes deny knowing that they signed these agreements, so it’s best to be upfront and honest so that they know exactly what they are agreeing to at the moment.

If an employee does decide to leave and starts their own company or joins a rival against the agreement, then you can take legal action against them. They are in breach of a contract that they agreed to, even though they don’t work for your company anymore.

Taking this action can help you on numerous levels. For one thing, you may have suffered financially if the employee is already working against you or taking your clients. For another, you demonstrate to the employees that are still on staff that you take these non-compete agreements seriously and you will do what it takes to protect your company.

That said, all of this can become complicated and it is certainly contentious if the employee feels that their career is being negatively impacted. You must know exactly what rights you have and what legal steps to take.