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The Best Way to Avoid Being Sued Over a Noncompete


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12/12/2019
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If someone held a gun to my head and forced me to choose the single, most important thing a departing employee should do - or, more appropriately, not do - in order to minimize the risk of being sued over a noncompete, this would be it:

Don't poach any existing clients.

The rationale behind this rule should be really obvious, provided that you view the issue from the appropriate perspective: from that of the former employer - rather than from the employee's perspective.

Consider:

In many, if not most, instances, an employer shouldn't particularly care if a mid-level employee leaves; that's just a fact of life all businesses have to contend with. In many instances, at least from the business's perspective, it's not worth bringing a lawsuit to prevent an employee from joining a competitor, because in the end of the day, it's not really impacting their bottom line in any significant way.

When a Business is Most Likely to Consider Suing Over a Noncompete

But that calculus changes dramatically when the departing employee starts trying to take clients out the door with him/her. Simply put, the life-blood of just about every business is its client base. And when someone threatens the life-blood of the business, survival instinct will kick in, and the business will often go to great lengths - perhaps even irrational lengths - to protect its livelihood. In other words, there is little in the business world that will more strongly motivate a business to bring legal action than sensing its lifeblood is being threatened by a formerly trusted employee.

Practical Considerations

In an ideal world, a departing employee can work in a completely different industry during the pendency of the noncompete, and thereby avoid any risk of being sued by their former employer. Often, however, that is not practical, if for no other reason than the employee can't earn a reasonable living in any other field at this stage of their work life.

So how can employees who need to continue in that (competing) field mitigate their risk of being sued?

First, and most importantly, they should try to secure completely new business, i.e., they should avoid working with any of their old clients until the restrictive covenant expires.

Second, they should avoid raising the stereotypical red flags on their way out the door, such as downloading or forwarding a copy of their contacts to their personal email or cloud accounts.

A Final Takeaway

At the risk of stating the obvious, each of these scenarios is fact-specific to the employer and employee, and the consequences of a misstep in this area can mean the difference of tens, or hundreds of thousands of dollars. Therefore, a departing employee would be well-advised to spend the money to consult an attorney knowledgeable in the area of non-competes before taking the plunge and leaving their job for greener pastures.



Category: Non-Compete & Employment Agreements

Jonathan Cooper
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Non-Compete, Trade Secret and School Negligence Lawyer

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