Employee Poaching (CONT’D FROM PAGE 26)
protections that were thought secure. “Another reason to avoid overreach is because it may reduce the employ- er’s credibility with the court when seeking to enforce the non-competes that really matter,” adds Dretler. And he adds one more potential pitfall of unreasonable non-com- petes: Some valuable prospective employees may decide not to join a company out of fear they will be bound by a too-onerous non-compete when the time comes to leave. Non-Solicits As the above comments suggest, non-competes can backfire when they fail to hold up to a court challenge. Very often that means an employee who has jumped ship is free to conduct business without any restrictions. And that can leave the former employer in a bad competitive position. There is a solution to this problem, and it comes in the form of another restrictive covenant. Often referred to as “non-solicits,” these covenants are designed to keep an employee who moves to a new business from soliciting a former employer’s customers for a set period of time. “An agreement not to solicit customers is often easier to defend than a covenant not to compete,” says Joseph Y. Ahmad, a founding partner in the Houston law firm of Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing ( azalaw. com ). “That’s because it is narrower in scope, allowing the employee to work for a competitor.” Courts like the fact that these agreements preserve the ability of the individ-
court will uphold it as reasonable,” cautions St. Antoine. An example of a very reasonable covenant would be one that calls for a one-year moratorium on working for a compet- itor, within the radius of one mile of the original employer. State Laws Achieving the right balance is a tricky proposition, not only because each employer-employee relationship pos- es unique circumstances but also because no federal law provides a common nationwide playing field. Everything depends on state law, and that can differ substantially. “Fifty states have fifty permutations of what employers can lawfully restrict with written agreements,” says Mathis. “Many states allow restrictions for reasonable periods from six months to two years. Some states are more em- ployee friendly than others. In California, employers gen- erally cannot have any kind of restrictions.” The challenge is becoming greater because in many states the law is trending toward greater worker protec- tions. “The world is changing very rapidly,” says Dretler. “States are trending toward limiting non-competes. Many federal, state, and local initiatives, legislation, and news commentaries are asking whether there should be limits put on them. Are they anti-competitive? What’s really pro- tectable? There’s a lot of litigation about these issues.” Employers, then, need to avoid over-reach that can backfire when an unfavorable court decision removes the
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