Philadelphia Employment Lawyers | Drafting & Enforcing Non-Compete Agreements & Trade Secrets Protection
Non-Compete Agreements are Legally Binding in Pennsylvania
A non-compete agreement between an employer and an employee is a legally binding guarantee made to protect the business interests of an employer. Upon hiring or promotion of an employee, it is vital that the employer executes a carefully stipulated contract, or clause in a contract, forbidding the employee from pursuing employment with the employer’s competitors within specific parameters and/or sharing with competitors confidential information about the employer’s business, such as trade secrets, customer or client lists, business practices, products in development, and marketing plans.. The complexities of a non-compete agreement make it necessary to hire an employment law attorney who is knowledgeable about the intricacies of a well-written, enforceable agreement.
Enforceable Non-Compete Agreements
For a non-compete agreement to be legally binding, it must carefully outline:
- a specific reasonable amount of time for the limitation,
- a specific reasonable geographic vicinity for the limitation, and
- a legitimate business interest to be protected by the limitation.
Consulting with a New Jersey employment attorney can ensure that the clause or contract is enforceable in the event of a breach of the non-compete agreement.
The Philadelphia employment attorneys at Sidney L. Gold & Associates understand how important it is to protect trade secrets and business practices. Current and former employees that fail to honor a non-compete agreement threaten the stability of a business. Protecting a company’s interests from the beginning of a business relationship is an important factor in determining and sustaining their competitive edge.
Non-Disclosure Agreements Are Crucial to Protection of Trade Secrets
A trade secret is information in the form of a formula, customer databases, production methods, or other information that, if disclosed, would allow a rival to compete for the owner’s profits. Trade secret protection and trade secret infringement do not apply to patented information which is part of a public record protected by federal laws. It is wise to require all employees and business associates that are privy to trade secrets to sign a non-disclosure or non-compete agreement. If they fail to uphold the stipulations of the agreement, and are found guilty of trade secret infringement, they face stiff monetary consequences. The enforcement of the non-disclosure or non-compete agreement remains in effect for as long as the trade secret is valued by the owner. Once the trade secret is divulged by the company, the trade secret is no longer protected by these agreements. Our Pennsylvania and New Jersey employment law attorneys have represented both employers and employees in trade secret cases.
Employer’s Options in a Breach of a Non-Compete Agreement
If a current or former employee fails to abide by the contractual stipulations in a non-compete clause or contract, the employer has several options. The threat of a lawsuit will deter most employees from violating their non-compete agreement, but this is not always in the best interest of the employer. Litigation can be lengthy and expensive. Fortunately, there are more affordable options. The Pennsylvania employment attorneys at Sidney L. Gold & Associates can work with the employer to defend the non-compete agreement in the following ways:
- Cease and Desist Letter: The first line of defense for an employer who finds out that an employee or former employee is working with a competitor is writing a “cease and desist” letter. The letter would be addressed to the employee and/or their new employer. In it the employer can outline the stipulations of the employee’s non-compete agreement and warn them of a potential breach in this agreement.
- Arbitration/Mediation: Because litigation is a costly and time consuming venture for the employer and employee, arbitration and mediation offer a reasonable alternative. The mediator or arbitrator will act as an impartial party and review both sides of the dispute. They will then work with the employer and employee to come to a settlement that protects the employer’s business interests, and allows for the employee to pursue other employment.
- Injunction: When an employer becomes aware of a breach in a non-compete agreement, he may file an injunction, which is a type of restraining order that prevents the employee or former employee from working with a competitor.
- Litigation: An employer has the right to file a lawsuit against an employee or former employee and their new employer when a non-compete agreement has been violated. The employer can sue for damages and legal fees from both parties. The new employer can be found liable if they encouraged or facilitated the employee in breaking the non-compete agreement. In most cases, the new employer will avoid litigation by dismissing the new employee, or putting a stop to the services rendered from the employee.
Pennsylvania & New Jersey Employment Attorneys at Sidney L. Gold & Associates
Sidney L. Gold & Associates is the preeminent employment law firm in Philadelphia. Representing clients throughout Pennsylvania and New Jersey, our employment law attorneys are skilled negotiators and litigators with a long history of success. Whether you are drawing up a non-compete agreement, rewriting stipulations for a present contractual clause, or need to respond to a breach of a non-compete agreement or trade secret infringement, our employment law attorneys can help. Contact our Philadelphia office at 215-569-1999 to schedule an appointment with one of our experienced, knowledgeable NJ employment lawyers or contact us online.