Non-Compete Agreement Tips for Partners, Executives, and Employees

In this post, I continue the discussion about non-compete agreements in Connecticut.  This time, I focus on the employee side.  Here are 5 things to think about when leaving employment if you have a non-compete agreement.

 

  1. Do not believe water cooler experts.  Many employees come to believe what they hear at the water cooler about non-compete agreements.  The typical comments include: “Those things are thrown out of court,”  “John Smith had one of those, and he beat it in court.”  The reality is, some non-competes will be upheld in court in Connecticut, and others will not.  There is no bright line test.  Every case is unique and there are too many factors to cover in one blog post. 
  2. Get help sooner rather than later.  The biggest mistake employees make is failing to get an experienced attorney’s review of an employment contact BEFORE planning to leave.  Examples of these agreements include non-competition agreement, non-solicitation agreement, or confidentiality agreement.  I emphasize “experienced” because the law surrounding non-compete agreements and unfair competition is constantly changing.
  3. Develop an exit strategy.  Leaving without a plan is not a good idea. Employees need a plan that includes understanding the parameters of the agreement and mitigating the risks of breaching it.  I have seen clients lose sleep, jobs, and thousands of dollars because there was no plan in place.  I will offer more on exit strategies in a later post, but some ideas include negotiation with your existing employer, finding holes in the contract, modifying employment decisions to mitigate risks, and taking a wait and see approach.   

4. Be mindful of confidential information.   The idea here is to minimize your exposure to a lawsuit for theft of confidential information or misappropriation of trade secrets.  Determining whether information is protected as confidential or a trade secret might be a complex analysis.  The same can be said for improper use of such information.  Further, there could be valuable information that an employee is entitled to use but it depends on many factors. 

 

5. A written contract is not the only issue.  In the context of leaving an employment position or partnership, Connecticut recognizes causes of action that do not require a contract.  These include breach of the duty of loyalty, breach of fiduciary duty, misappropriation of trade secrets, computer crime, civil theft, and unfair trade practices.  Your exit strategy needs to consider all of these factors, and not only the contractual agreement.