How do I enforce a noncompete agreement?

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Question:

I own a small software company. One of my programmers, who signed a noncompete agreement when I hired her, just announced she's leaving to take a similar job with a competitor. I'm in a panic that she'll violate the agreement and give away our trade secrets. What should I do?

Answer:

Your agreement is supposed to prevent your employee from using your company's confidential information while working for a competitor, so it sounds like your employee may be on her way towards violating the agreement. Assuming that your noncompete agreement was written to comply with the laws in your state, and that your employee is still within any time limitation specified in the agreement, here are the next possible steps:

Sit down with your employee and go over the exact terms of the agreement. Explain to her (nicely) that while you understand she's interested in pursuing this new job, she has an obligation to abide by the agreement. Make it clear that you're ready to take further action against her and possibly against her new employer. If you're lucky, you might find out that the new job isn't as similar as you think it is, and your secrets will be safe. Or it might turn out that she wasn't clear on what your agreement meant, and will decide to stay put.

If, however, she's clearly hostile and bent on taking the new job, you'll probably have to play the heavy. That means getting some legal help. The lawyer might help write a letter to the future employer alerting it to the situation. When the future employer reads "possible litigation," it may well decide not to hire your employee after all. (The lawyer's help is critical here because sending off letters that cause people to lose job offers carries certain legal risks.)

If the letter doesn't work, your next step may be into a courtroom. In most states, the judge should be on your side as long as your agreement is fairly drafted to protect your company's confidential information and isn't so restrictive that it prevents the employee from taking another job. Certain states are, however, less friendly to noncompete agreements, especially California.

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