3 Ways to Protect Your Business from Former Employees’ Competition

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3 Ways to Protect Your Business from Former Employees' Competition

When you need to protect your business from former employees’ competition, getting signed agreements is key. These agreements give assurances that your business secrets cannot be copied without your permission. Non-competition agreements, confidentiality and non-disclosure agreements, and intellectual property protections can safeguard your important information from competitors.

  1. Non-Competition Agreements

Non-competition agreements can help you protect your business from former employees who leave for competitors. It can happen in any industry: employees leave your business and begin working for a competitor in your field. Sometimes, competitors may “poach” valuable workers by offering them more money to leave your business and work for them. Or the employees may decide to leave your business on their own, seeking greener pastures. Unfortunately, this could cause you production, staffing, or recruiting problems.

To prevent employees from abruptly leaving for competitors, you can ask them to sign non-competition agreements. These legally binding agreements restrict employees from going to work with competitors under some circumstances. Importantly, non-competition agreements must have a restricted scope. You cannot prevent employees from working anywhere in the world for any company remotely similar to yours. Instead, your agreement should have some reasonable limitations on geography, type of business, and so on. This will increase the likelihood that a court will uphold the agreement if it is challenged.

If you think you need a non-competition agreement for employees, please reach out to an experienced business lawyer for assistance. You should get legal advice on the wording of any non-competition agreement. Protect your business from the competition by having employees sign this kind of agreement.

  1. Confidentiality and Non-Disclosure Agreements

In addition, confidentiality and non-disclosure agreements can help you protect your business from former employees. These agreements restrict current and former employees from disclosing important information about your company that is not publicly known. In particular, your business may have the following in-house information that you do not want competitors to have:

  • Trade secrets
  • In-house manuals and process documentation
  • Work product
  • Customer lists
  • Sales numbers
  • Budgets and projections
  • Employee info such as salaries and HR records

Have your legal counsel prepare a robust confidentiality and non-disclosure agreement for you, or ask them to review your existing agreement. Your business should have appropriate safeguards in place to deter employees from sharing this information with others.

Moreover, former employees may retain valuable information about your business operations even after they leave the company. Your confidentiality and non-disclosure agreement should include clauses to address this: (1) a restriction on sharing confidential information after employment with your business ends, and (2) a document retention policy that prohibits former employees from taking company files, electronic devices, and work product with them when they leave.

  1. Intellectual Property Protections

Finally, intellectual property protections are a third way to protect your business from former employees. Intellectual property (IP) in the United States includes:

  • Trade secrets
  • Copyrights
  • Trademarks
  • Patents

Your business can gain legal recognition of its designs, marks, written works, and other important work product because it is intellectual property. The law protects intellectual property in a few ways, including the right to sue if someone appropriates your company’s intellectual property for their own use. For example, you may be able to file a lawsuit if an employee reveals a trade secret to a competitor or if a competitor copies your logo design.

For some types of intellectual property, you must make a government filing to have your work recognized legally. For others, you may need to show that the work was created by your business or that it is unique. To check whether your business has optimum intellectual property protections in place, please speak with a business lawyer who has experience with IP rights.

At Henke & Williams, we can help you protect your business from competitors. Our lawyers can assist and advise when you have questions about non-competition agreements, confidentiality and non-disclosure agreements, or IP rights.

We Can Help Keep Your Business Running Smoothly

As experienced Houston business lawyers, Henke & Williams helps our clients find the best solution possible. When your business needs assistance with litigation, IP rights, or dealing with employees leaving for competitors, we can step in and help you move forward. Our advice is not “one-size-fits-all” but is tailored to your unique situation. To set up a consultation, call 713-940-4500 or use our convenient Contact Form.

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