United States: Protecting Your Competitive Edge

Lesenswert in Bezug auf US-Regelungen zum Schutz gegen Abwerbung, Konw-how “Verlust” etc. Article by Mark E. Furlane and David J. Woolf, http://www.mondaq.com

This newsletter explores important considerations for companies and some uncommon approaches to protecting your company’s competitive advantage, customers, confidential information and employees from unfair competition and poaching.

Decades of experience and knowledge of the uneven statutory and common law of the 50 states teaches that a company’s defenses to unfair competition must include a coordinated system of protection to be effective. Some states are friendly to efforts to protect competitive advantage, some are unforgiving and some are downright impossible. But whether you are in the best of states or the worst of states, there are some measures that every company should consider keeping in its arsenal to protect its competitive edge.

Top Restrictive Covenant Agreement Considerations for Employers

This article continues our discussion from the last newsletter of important considerations on which companies should focus to create an enforceable array of competitive advantage protections. In this, and in subsequent client communications, we will focus on the most important considerations, not only contractually but also under state and federal common and statutory law.

Employee raiding covenants. Though most state courts will permit reasonable contractual restrictions on not soliciting other company employees, there are some jurisdictions that have refused to enforce such restrictions. Courts are also mixed on the extent to which an employee’s duty of loyalty, as opposed to a company officer’s fiduciary duty, restricts the employee from encouraging a co-worker to join the employee at a competitor, so you should review the state law that will apply to your situation.

Even in states where courts have not enforced postemployment restrictions on soliciting employees, an in-term restriction will generally be enforced, so you should apply such restrictions both during an employee’s employment and after termination. In deciding whether to enforce these restrictions courts look to protectable interests of an employer. They generally review such restrictions to determine whether they are reasonably necessary to protect an employer’s confidential information about its employees or justified by an employer’s interest in maintaining a stable work environment. Courts in some states have refused to enforce such clauses, concluding that an employer does not have a proprietary interest in its at-will employees or in their skills. In other cases, courts have held that there did not exist confidential information in need of protection. To demonstrate the need for such restrictions, it is often important to document the employer’s expenditures on training and maintaining the work force, and the efforts undert…

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