In some professions, companies may require you to sign a non-compete agreement when they offer you a job. A non-compete agreement is basically a legal document that bars an employee from working in a competing business while they are working for your company, and for some period of time thereafter.
Non-compete agreements are used for many reasons, but how do you catch workers that violate them? In this competitive job market and with this current generation, job hopping for a bigger and better deal is fairly common place. Here’s what you need to know.
Non-compete agreements have three major reasons behind them. First, businesses are trying to protect their unique customer relationships. Because an employee may be the “face” of the company, the non-compete agreement specifies that the employee cannot take their current customers with them when they change jobs. Second, non-compete agreements serve as a deterrent for the sharing or stealing of company information. It will give another company pause to hiring such an individual if they are threatened with a lawsuit if they hire him or her before the specified terms and conditions are met. Third and most important, non-compete agreements are used to protect a company’s proprietary and confidential information from being shared with competitors, especially its technical and intellectual property.
Violating a non-compete can include an employee going to work for a competitor, but it can also include an employee running their own side business before officially quitting and setting off on their own. If your company sells widgets and the employee starts to produce and sell their own line of widgets on the side, that is a clear violation of their non-compete agreement. If an employee leaves a company and takes certain client accounts with them, that is also a violation of their non-compete.
So how do you know if a worker has violated his or her non-compete agreement? Here are a few things to watch for if you suspect someone is about to leave your company and take more than his or her personal knickknacks with them:
- Emailing documents to themselves – As with any technology, there is a trail of electronic crumbs left when you email or save something to a thumb drive from a company computer. Any IT expert can trace this kind of behavior and have electronic evidence of your actions.
- Taking physical documents from the office – Removing and/or copying company documents from your place of business will always throw a red flag. Even if you have good intentions and don’t plan to share the documents, leave them at work or your actions may be scrutinized.
- Leaving disrespectfully or angrily – If you have legitimately found another job and have given your notice, be nice when you leave.Always try to leave on good terms no matter what or why you are leaving. This helps with the transition and doesn’t make your former employer suspicious of your actions as you are walking out the door.
- Trying to recruit your coworkers to come with you – This goes along with the previous tip…don’t try to take other employees with you as you leave your place of business. Even discussing the possibility (whether it is serious or in a joking manner) will do nothing but raise questions. In addition, you have now created credible witnesses that can provide testimony in a court of law if your employer attempts to pursue legal action.
If an employee violates a non-compete, your company can sue for damages. However, you first need to catch them with evidence strong enough to hold up in court. It can’t just be a manager saying, “Ted did it.” There has to be documentation and evidence to support the violation. That evidence can include:
- Surveillance photos or video
- Documentation that clearly shows it’s been stolen and shared
- Proof that the employee provided documents marked “TRADE SECRET” or “CONFIDENTIAL” to someone outside the company
- Proprietary customer lists being found outside the company
- Sharing of trade or company secrets that hurts the company financially
- Exploitation of relationships with existing customers
If you do decide to hire a private investigator, be sure that your PI obtains the specific evidence you need. Video evidence of a former employee coming and going at a competitor’s office, paperwork such as a purchase order or quote on the new company’s letterhead with the former employee’s name on it, or following the money trail are all effective ways to uncover damning evidence.
As Manhattan private investigatorDarrin Giglio says, “The paper trail – and now the electronic paper trail – is a good way to gather the appropriate evidence and definitely prove a violation of a non-compete contract.”
As is the case in most legal issues, you might want to check your particular state’s laws concerning enforcement of non-compete agreements – the laws and statutes will be different for every state.