November 21, 2014 Articles

Protecting Your Business Against Rogue Employees

How can you limit the damages of a former worker?

by Aaron Krauss

The call comes in, usually on a Friday afternoon. A client says that a key employee just resigned, with no notice. When your client tells the IT department to shut down the (now former) employee's computer access, the IT department says it was shut down the day before when the now-former employee reported that her company-issued laptop had been stolen out of her car. Aside from canceling your weekend plans (and asking your client to forward a large retainer), what can you do?

Hopefully, your client will have followed your earlier advice to have the key employee sign a restrictive covenant. If your client has done so, you at least have a decent chance (depending, of course, on the facts and circumstances and the jurisdiction in which you find yourself) of being able to buy your client some time before it must compete with its former employee. Even more hopefully, your client will have taken steps to protect its trade secrets. If you can prove that the now-former employee took trade secrets with her, you should be in a position to obtain an injunction and possibly money damages. Although the lack of a restrictive covenant or a misappropriated trade secret will make it much harder to protect your client, it is possible that you will be able to assert an unfair competition or tortious interference claim. In any of these events, you will have a great deal of work to do.

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