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Law Against Departing Employees

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By: Kum Martin

Departing employees can pose threat to a business owner in my ways. They often have company trade secrets and sensitive company information. For example, they may have customer list, or they may know company’s secret formula. Departing employees may take the client away by personal relationships as well.

But if employees have signed non-competition agreements, they employer may sue them. The law will honor the non-competition agreements within the duration. For example, an agreement may prohibit sale person from taking any former employer’s clients for one year. This contract is within a reasonable scope. If it is not reasonable, the law may deny it.

If the departing employees use the former employer’s trade secrets, the employer can sue them under the state trade secret law. For example, profit margin can be considered as trade secrets, because it will provide unfair advantage to a competitor. The trade secrets do not need to be in writing. A memorized customer list is considered as a trade secret.

If a former employee has competed against the employer during the time of his employment, the employer can sue against the employee for “breach of the duty of loyalty.” On this situation, the employee will probably be found guilty, because the employer had put the employee to learn the business.

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