Some competitors even try to steal employees to try to gain a competitive edge in the market. If an employee signs a non-compete agreement, the employer is protected. In one case, it cost the employees who left 6.9 million dollars.
In the case of B.G. Balmer & Co. Inc. v. Frank Crystal & Co., insurance brokers were found to have quit together to take customers with them and were found to be in violation of the non-compete agreements they signed when hired. As a result, a judge ordered a total judgement of 6.9 million dollars against the employees.
Employers usually insist on non-compete agreements because of the possibility that an employee, upon termination or resignation, will work for a competitor or start a business. The employee might then allow the new employer to gain a competitive advantage over their former employer by abusing confidential information about their former employer’s trade secrets or sensitive information such as business practices, upcoming products, marketing plans and customer or client lists. These agreements can also be enforced to prevent former employees from entering into work in a similar industry, even if that work would not involve the disclosure of trade secrets.
Marvel Law will help your business draft non-compete agreements that will allow for an amicable separation from an employee and the protection of your business interests. Contact us today for a FREE 15 minute consultation on how we can help your business create and enforce non-compete agreements.