Sometimes an employer’s greatest legal concerns do not arise until after an employee has left the company. Unfortunately, it may be too late at that point for the employer to adequately protect its interests.
In the absence of a restrictive covenant in an employment agreement, a company’s former employees are generally free to immediately go to work for a competitor, to solicit their former employer’s customers and employees, to use their former employer’s vendors and suppliers and to disclose confidential information that does not rise to the level of a trade secret. This relative freedom can result in great harm to the previous employer, particularly in instances where the former employee had strong relationships with customers, vendors or other employees, or where the former employee had access to significant and potentially damaging business information. In short, unless a company requires that its employees execute legally enforceable restrictive covenants (often referred to generically as “noncompete agreements”), there may be no way to prevent former employees from taking the training and knowledge the company provided them and using it for the benefit of a direct competitor.
Employers looking to protect their interests may face an even more difficult task in a state...
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