EMPLOYEE POACHING
EMPLOYEE POACHING
Avoid Litigation And Loss of Trade Secrets When Workers Jump Ship By Phillip M. Perry
A
California sales executive who jumped ship for a competing employer took along a folder of customer lists and marketing plans. Those items proved valuable resources for the conduct of his new duties—so valuable that his previous employer sued for violation of confidentiality and nondisclosure agreements, and illegal use of trade secrets. The results were costly cash settlements against the executive as well as the new employer who had encouraged use of stolen material. If that story sounds familiar, it’s no accident. Similar cases occur
SECOND QUARTER 2022
regularly around the country. When a star employee moves from one business to another, the resulting conflicts are often resolved in court. “This area of law is growing quickly,” says Ben Mathis, an Atlanta attorney and managing partner of the nationwide law firm of Freeman Mathis & Gary. “There are two competing interests at stake. The first is that of employers who have a right to protect their information from having people walk off and take it all with them. The second is that of the individual’s right to compete against his earlier employer.”
Resolving those competing interests can hit profits hard. “Court remedies usually involve financial damages for harm that had been done to the original employer,” says Theodore J. St. Antoine, degan professor emeritus of law at University of Michigan Law School in Ann Arbor. “There may also be an injunction prohibiting the losing party from continuing an illegal practice. If the losing party ignores the injunction and continues to do the prohibited activity, the result may be additional fines for contempt of court, or even jail time in extreme cases.”
Self-Storage NOW!
21
