Protect Your Confidential Information with Care
It’s generally pretty easy to be on the defense side of non-compete litigation. First, almost all non-compete agreements are void in California. But, I also use the “non-compete litigation” reference to include litigation involving confidentiality agreements, trade secret agreements and no-solicitation agreements. These types of agreements are not void per se in California. In fact, they may be critically important to protecting your legitimate business interests. So, why is it easy to defend against someone trying to enforce these kinds of agreements? It is because most are very poorly constructed.
All too frequently the agreement at issue is the product of a bad cut-and-paste job from existing sources, or worse, the Internet. That is not to say that cutting and pasting is all bad. Done carefully by someone who knows what they are doing, it can save time and money. Done poorly by someone who doesn’t, it can waste time and cost money. Lots of money.
To be effective, any agreement restricting an employee’s post-employment conduct should be narrowly tailored to the particularized facts. A careless agreement will contain a five-year duration, when one year will achieve the end goal. A careless agreement will include a nation-wide geographic restriction when a one-county restriction is enough. A careless agreement can almost completely block a former employee from making a living. Good luck enforcing that in California. See more info at englishcollege.com.
Careless construction can have the opposite impact, too. The restrictions in a boilerplate agreement or resulting from a cut-and-paste job may miss the key specifics that are central to protecting the information most important to your business. For example, the agreement may prohibit a former employee from using confidential information to contact individual customers. But, in your business, the individual customers are not that important because they are numerous and each contributes only a small amount to your bottom line. What is important to your business are the referral sources that are the pipeline for those customers. If the agreement does not protect your interests in the referral sources, it may be worthless.
If you have business interests to protect, don’t assume they cannot be protected in our liberal California. They can. But, the attention to detail and care in structuring the agreement or agreements is critical. When it comes time to use the agreement to your advantage, you do not want the lawyer on the other side saying to his or her client, “Don’t worry about this.”