Restrictive Covenants
The attorneys at Clouse Brown negotiate and draft non-compete and non-solicit provisions so that our clients — executives, partners, or professionals — are protected from unfair restraints on their careers in the future. We focus on protecting our clients’ rights while allowing them to fulfill reasonable obligations to the businesses they lead.
We strongly encourage our clients not to sign or agree to any restrictions on their employment without first consulting with our team. Consulting with our lawyers before, not after, starting employment can often prevent problems later.
Non-competition and non-solicitation provisions in contracts, often called restrictive covenants, can limit an individual’s ability to work after their employment ends. These restrictions can also prevent an executive or professional from starting a new business in the same industry for a period of time after employment ends, or from soliciting employees, clients, or customers after leaving employment.
Other restrictive covenants involve protection of confidential information and trade secrets. Clouse Brown attorneys are experienced with advising employees on compliance with trade secret laws. Trade secrets are business-related information that is valuable and secret. Employees may be obligated to protect their employers’ trade secrets even if they have not signed confidentiality or non-disclosure agreements. Courts weigh multiple factors to determine whether information is a trade secret, including:
- the extent to which the information is known outside of the business;
- the extent to which it is known by employees and others involved in the business;
- measures the business took to keep the information secret;
- the value of the information to the business and its competitors;
- the amount of effort or money the business expended in developing the information; and
- the ease or difficulty with which others could properly acquire or duplicate the information.
Employers may try to sue current or former executives for misappropriating trade secrets. Such penalties, along with the cost of litigation, can harm employees in numerous ways, including preventing them from starting a business or working for another company, or damaging their reputation.
Restrictive covenants are frequently contained in employment agreements but they are also found inequity agreements, stock and option grants, and offer letters. They can also be stand-alone agreements that are signed before or during employment without an opportunity to consult with counsel.
