What To Do About a Breach of a Noncompete Agreement

If your employees deal with sensitive or proprietary information about your company or your customers, you can ask them to sign a noncompete agreement when they begin employment with you. By signing the agreement, employees agree that they will not get a job with a competitor in close proximity within a certain period of time after leaving your company.

Noncompete agreements need limitations on time and distance to be valid and enforceable. If you find out that a former employee has violated a noncompete agreement signed in good faith, here are some of your options.

1. Contact the New Employer

Before you can take any action against a former employee for violating a noncompete agreement, contacting the new employer allows you to gather information to confirm whether a breach has taken place. It also allows you to apprise the new employer of the situation so he or she can take any action he or she deems appropriate.

2. Protect Customer Relationships

An employee whose position involved interacting directly with customers may try to poach them away from you after leaving your company. You can prevent this by proactively reaching out to customers to inform them that the former employee is no longer with the company and introducing them to the new point of contact.

3. Cease and Desist Letter

Once you have verified that your former employee has violated the terms of your noncompete agreement, you can send him or her a cease and desist letter. This serves as a warning that you are aware that a violation has taken place and are prepared to take action. It may be sufficient to persuade your former employee to give up his or her employment with your competitor without you having to take any further legal action.

4. Injunction

If the cease and desist letter does not work, you can ask the court to issue an injunction requiring your former employer to give up his or her position with your competitor according to the terms of your noncompete agreement. This provides you with relief without having to go to court to prove that you incurred damages as a result of the violation.

5. Lawsuit

If all efforts to prevent your former employee from violating the noncompete agreement fail, you may suffer monetary damages as a result. If so, you may be able to file a lawsuit against your former employee to recover what he or she cost you by noncompliance.

A business lawyer in Bethesda, MD, like from Brown Kiely, LLP, can help you to draft an enforceable noncompete agreement as well as assist you if a former employee is in violation of it. Contact a law office to schedule a consultation.