Employee Poaching (CONT’D FROM PAGE 30)
enants. Just as a non-solicit may be more effective than a non-compete, one more less onerous restrictive cove- nant—the confidentiality agreement—can in some circum- stances be the most effective of all. “A confidentiality or non-disclosure provision prevents the departing employees from disclosing or using the pro- prietary or confidential information of their ex-employers, or that of their employers’ customers,” says Hwang. After defining the nature of the organization’s sensitive informa- tion, the agreements state that the signers will take mea- sures to keep it secret. “The information in dispute does not have to be a ‘trade secret’, but must simply be confi- dential, proprietary, or not publicly available.” Because the legal system of every state recognizes the right of businesses to protect their sensitive information, confidentiality agreements are generally highly defensible in court. Attorneys advise that they be signed by any em- ployee who has access to sensitive business information. They provide valuable evidence that an employer has tak- en steps to communicate the importance of discretion to employees. Luring Star Performers Now for the other side of the coin. Employers need to be careful about violating a competing business’s restric- tive covenants when luring away a star performer. The le- gal fees and time required to defend one’s actions can be costly, even when a court strikes down the first employ- er’s covenants as unreasonable. “Some employers draft
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restrictive covenants knowing they will not be enforceable but will scare people into behaving as desired,” warns Mathis. “Employers with deep pockets can cause a lot of trouble.” Attorneys advise taking some prudent precautions during the hiring process. Ask what agreements the em- ployee has signed with his current employer. The individu- al who never signed a non-compete might have signed an agreement not to solicit the certain customers or to recruit coworkers. “When a new employee is hired it’s a good idea to get
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32 March 21, 2022
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