Q. We want to hire someone who signed a noncompete agreement with his current employer. He asked us to indemnify him in the event his employer sues him. What are the legal risks associated with agreeing to indemnify him?
A. If the prospective employee signed an enforceable noncompete agreement with another employer and would violate it by accepting a job with you, three things could happen.
- The former employer could sue the employee for violating the noncompete.
- The former employer could also seek a temporary restraining order preventing him from working and seeking enforcement of the terms of the agreement.
- The former employer could also sue your company.
If you agree to indemnify him, this typically means that you would assume the defense of any lawsuit against the employee for violation of the noncompete, and pay for any expenses associated with violation of the noncompete, including attorneys’ fees, witness fees, damages, judgments, fines and amounts paid in settlement. Those amounts could be substantial.
Along with the monetary risks, there is the possibility that the court could prohibit the employee from working for you at least for some specified time.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/30813/is-it-risky-to-indemnify-a-candidate-against-violating-a-noncompete-agreement "
- The best reason to retain personnel documents: Employees--and courts--have long memories
- Prepare unified defense; ruling may spark more state suits
- Creating an effective blog policy to limit employer liability
- DCF spokesman faces child abuse charges
- MIOSHA appeal process: What to expect after receiving a citation