You may think that employees understand their obligations when they sign noncompete and nonsolicitation agreements designed to prevent them from jumping ship and stealing your clients. Don’t make that assumption.
Instead include loyalty training in your orientation programs. Explain that your organization can and will sue to protect its rights. That may be enough to prevent incidents like this recent one.
Recent case: Jaye worked for years for Angelica Textile Services, San Diego’s largest provider of hospital and commercial laundry services. He signed an agreement that he would not solicit the company’s customers or steal trade secrets.
On behalf of Angelica, Jaye negotiated laundry contracts with several large clients that included an easy, 90-day no-fault out for those customers. He did this while developing a laundry business plan for a potential competitor. Then he resigned from Angelica, joined the newly created laundry and induced the customers to end their Angelica contracts.
Angelica sued, alleging that Jaye breached his duty of loyalty even apart from any specific agreement he had signed.
The court said Angelica had a case and could try to recoup the losses attributable to Jaye’s actions. (Angelica Textile Services v. Park, et al., No. D062405, Court of Appeal of California, 4th Appellate District, 2013)
Final note: Employees who know you will sue them if they breach their obligations are less likely to do so—especially if you give them specific examples of what’s prohibited.
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Are there special requirements for training employees who do not speak English well?
- Employee has used all FMLA leave? Assess disability status before terminating
- Pregnant employees: Where can you draw the line?
- Arbitrating claims? Chances are appeals court will uphold decision