There are a number of different employment forms and clauses that are designed to protect companies of all sizes. A clause in a standard contract may be enough to legally prevent an employee from exploiting confidential information such as client lists in some industries. In the technology industry, however, non-compete agreements are necessary to protect trade secrets and prevent former employees from working for a direct competitor or starting their own company in the same industry for a certain period of time.
A former executive at Motorola is being accused of violating a non-compete agreement after accepting a position with a direct competitor. As one of the conditions of accepting restricted stock from the communications company, he agreed not to work for a competing company for a minimum of one year after leaving Motorola. The company has filed a lawsuit against the man for breach of contract. The former executive also signed a confidentiality agreement, according to the lawsuit, and is being sued for misappropriation of trade secrets. Motorola is seeking more than $50,000 in legal fees and damages and is asking the court to preclude the man from taking the job at the rival company.
It remains to be seen whether or not the non-compete agreement will hold up in court in this case. Legal contracts of any type must be carefully thought out and precisely worded in order to successfully serve their purpose. Business owners could benefit from having an attorney well versed in business and commercial law review their current contracts and/or draw up new contracts entirely.
Source: ChicagoBusiness.com, “Motorola sues top exec recruited by rival,” John Pletz, Sep. 19, 2013.