Dave Ciambella

Oh no, my best employee is leaving for another job!

This happens many times each day across the country and often the departing employee is leaving you to go to work for one of your competitors. The question is: are you protected? Have you instituted good business practices that address this very issue?

You may ask, what do you mean? Well, here it is. Have you implemented a Non-Compete Agreement that can be upheld in your jurisdiction? If the answer is no, then you might want to get to work immediately with your attorney and other advisors.

There are many ingredients that constitute a well thought out and defendable Non Compete Agreement. However, it is imperative you seek the guidance of an attorney who has experience and can reference local case law that can be referenced in the event you find yourself in a dispute with an employee. Some of the important ingredients to consider are:

• preclude an employee from competing directly with you in a certain geographical area (for example, a twenty-five (25) mile radius)
• establish a period of time that the employee is unable to compete with you either directly or in your industry
• preclude the employee from soliciting and recruiting your employees
• preclude the employee from taking customer lists and confidential client information
• require lifetime confidentiality regarding proprietary information and customer
• ensure there is “consideration” in exchange for the employee signing the agreement

You can expect some resistance from some employees (particularly employees who have been with you for some time and who may now be asked to sign an agreement after the fact). However, I encourage you to engage these employees and help them understand that this documentation is in their mutual best interest as it can assist in protecting and building company value as well as protecting their livelihood which is made possible through your business.

Posted by Dave Ciambella on June 9, 2008 | Comments (3)