QUESTION

An employee left to work for a competitor and took several customers. What are our options?

SHORT ANSWER
Review any agreements you had with the employee and analyze whether the information constituted a trade secret. Be consistent in treatment of departing employees.
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When an employee starts working for a competitor it is important to be diligent but not hasty.

In such a situation, the business should review any non-competition, non-solicitation, and confidentiality agreements to determine if they have been violated. It is important to bear in mind that Courts will not always enforce such provisions, so an analysis of the agreements and the facts is necessary.

A business should also determine if the employee took any information that can be considered a trade secret. Also, an investigation may reveal that the employee improperly used company resources (computers, contact lists, etc.) in making their move to the new employer.

If warranted, the employer can send a letter to the employee and their new employer demanding that they “cease and desist” from engaging in any further conduct that violates their legal duties. For example, the letter might demand that they return misappropriated property, or that they have no contact with certain customers. If the misconduct persists, the business can file a lawsuit, and even seek emergency relief in the form of a temporary restraining order. In some circumstances, a business may choose to forego the cease and desist letter and file suit right away.

It is important for a business to have a consistent policy when it comes to employee departures and confidential information. Businesses often run into trouble when they try to enforce contractual obligations against some employees, but not others.