Non-Compete Agreements: Five Mistakes by Three Parties

Non-compete agreements are always a hot topic when employees move around a lot and due to COVID-19, a lot of employers have had reductions in force this year.  As a result, we’ve seen an uptick in questions about non-competes.  In the typical case, an employee leaves one employer for a new employer and the former employer believes that the employee is violating his or her non-compete agreement.  Thus, in any non-compete case, there are three possible parties: 1) the former employer; 2) the employee; and 3) the new employer.

Each of these parties may make mistakes that interfere with their interests in litigation over the non-compete.  In this episode of The Practical Employment Law Podcast, I discuss five mistakes that each of the three potential parties commonly makes and how to avoid them.  Here are the mistakes:

Former Employer Mistakes:

1. One size fits all agreements;
2. Administrative failures;
3. Inconsistent enforcement;
4. Failing to define trade secrets;
5. Failing to protect trade secrets.

Employee Mistakes:

1. Taking documents or information from the former employer;
2. Going to a direct competitor;
3. Not disclosing a non-compete agreement to the new employer;
4. Relying on rumors;
5. Working for the new employer while still employed by the former employer.

New Employer Mistakes:

1. Not asking about non-competes during the interview;
2. Poaching the competition’s employees;
3. Allowing the employee to violate his or her non-compete;
4. Allowing the employee to upload documents to company servers;
5. Asking the employee to do work while still employed by the former employer.

Comments or questions: Contact Mark Chumley at mchumley@kmklaw.com or visit www.kmklaw.com

Music :

Jamming with Leon by texasradiofish (c) copyright 2020 Licensed under a Creative Commons Attribution Noncommercial  (3.0) license. http://dig.ccmixter.org/files/texasradiofish/61983 Ft: Scomber