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Indemnify a Noncompete? Not So Fast

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in Human Resources

Q. We want to hire an individual who signed a noncompete 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? —V.M., Virginia

A. There are too many risks to address here. But the main concern is that you really have no way of knowing what the prospective employee may have already done to violate the agreement or will do in the future. You could find yourself defending an employee who engaged in misconduct without your knowledge.

Many companies mistakenly believe that noncompetes are rarely enforceable and that a former employer won't bother to pursue legal action as a result. Don't believe it: Always assume that the noncompete will be enforceable and that the former employer will try to enforce it. While much depends on the judge and the employee's conduct, courts do enforce these pacts. Even a baseless claim can cost thousands of dollars to defend.

Instead, encourage the employee to seek a waiver from his former employer, particularly if the pact appears strict.

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