We have a small business, and recently, one of our key employees quit unexpectedly. Of course, we quickly secured things, but a customer just called to say that she has been contacted by the fellow, and that his company’s brochure is quite similar to ours, offering the same services and products. We did not have a non-compete agreement, but we’d still like to know if there is something that we can do to prevent his new employer from trying to take all of our customers.
Dear Angst (may I call you that?):
It sounds like your former employee may have done some very common, but nevertheless, actionable things when he left your company. Without a non-compete agreement that is reasonable in scope and duration, the law usually will not prevent competition between you and your former employee, but your competitors are not allowed to profit from your intellectual property in competing with you. For that reason, you may want to carefully examine this “new” brochure, because it may infringe your copyrights (you did follow the Doc’s previous advice, and register your copyrights when you created the brochure, right? If not, let’s talk – soon!) If your dearly departed worker is contacting a lot of your customers, he may have copied your customer list, which may be protected both as a copyright and as a trade secret. It’s also common for employees to copy massive amounts of data from your computers before leaving – forms, specifications, bid documents, supplier lists, marketing materials – and these copies may not be authorized or legal.
Enforcing your rights is something best done very quickly. Often, filing an action for an injunction that seeks to prevent the former employee and his new employer from copying or using the materials that he took from your business may be done in Federal court, and the decision may come in a matter of hours or days. The court may also order discovery so that the former employee’s computer and files may be searched to find out what was taken.
We know that litigation is usually viewed as a last resort, but in cases where you’ve invested a lot in developing marketing materials and a good customer list, it may be quick action in court that preserves that investment for your company, rather than handing it to a competitor for free.
As always, ask the attorneys at LW&H – they do this stuff regularly.
— Lawrence A. Husick, Esq.