Your options for enforcing a noncompete agreement

On Behalf of | Apr 16, 2019 | Uncategorized

Business owners across Utah face a wide array of threats to their business on a regular basis. Unfortunately, many of these threats can come from inside your business itself from your employees.

Employees are essential to the success of your business. Yet, when employees leave to pursue other employment opportunities, they may reveal key components of your business to competitors. Whether unintentionally or maliciously, such revelations can put your competitive edge at risk. What are your options to either prevent this or fight back?

Drafting sound noncompete agreements

Many companies across Salt Lake City and Utah choose to implement noncompete agreements along with employment contracts when employees first begin work. This agreement can prohibit employees from working for direct competitors or even starting their own business in the same field for a specific period of time after parting ways with your company.

Noncompete agreements can protect a wide array of company property or confidential information, including:

  • Intellectual property, including patents, trademarks, trade secrets and more
  • Customer information, including customer lists
  • Private company information like business plans or pricing formulas
  • Information on future plans, products or ideas

Structuring such agreements can be key to enforcing the agreements in the event of a future dispute. Noncompete agreements should give sound reasoning why the agreement is necessary, specific dates as to when the agreement becomes effective, details on how the employee will benefit from the agreement and more.

Enforcing a violation of the agreement

The terms of your agreement will likely determine your course of action after a violation occurs. You should first consider how a court could view the actions of the employee in relation to your noncompete agreement. Employees in lower ranking positions who now work for an industry or company outside the limits of your noncompete agreement may gain the favor of the court.

However, when a current or former employee with substantial knowledge of confidential information decides to move on to a direct competitor, you may need to consider your options. This could include alerting the competitor to the potential for legal action should the employment arrangement follow through and seeking a resolution through negotiations, mediation or litigation if necessary.

Your proprietary information makes your company unique. Protecting this through noncompete agreements and vigilantly ensuring the validity of such agreements can help to keep your company’s information out of the hands of the competition.