NON-COMPETES: TO SIGN OR NOT TO SIGN

March 24th, 2018 Posted by No Comment yet

Employers often condition your hiring (or the continuation of your employment) on your agreement to not compete and/or not solicit their clients or employees during and after your employment.  If you are asked to sign a non-competition or non-solicitation agreement the best course of action is to have an attorney with experience in this area review it to determine the effect it may have on your future.  An attorney with experience in this area will know that these agreements are often negotiable because employers recognize that if they make the restrictions too broad they will not be enforceable.  With a few simple adjustments to the language the legitimate interests of both parties can usually be addressed.  Even if the employer will not make the requested changes, you will have at least laid some of the groundwork needed to support a claim that the restrictions are not enforceable if the employer seeks to enforce it against you in the future.

USE OF TRACK RECORDS BY ANALYSTS AND TRADERS

March 17th, 2018 Posted by No Comment yet

As part of their job search, analysts and traders often share their “track record” with prospective employers to establish their value.  However, such information is confidential and proprietary to your current and/or former employer.

The only exceptions are that the information is either publicly available, or can be compiled from public sources.  Absent these exceptions use of this information does create risk to both job and career.

While I am in no way advocating or advising that sharing your “track record” is appropriate, I also recognize that it happens.  Assuming you are willing to take the risk then you need to either (a) get an agreement from your employer when you first join that you may disclose your “track record” to future employers; or (b) leave no credible trace by sharing your track record only in a face to face meeting and leaving no copies with your prospective employer.  Above all, do not use email to send your “track record” to yourself or anyone else.

NON-COMPETES: THE PRACTICAL RISK

March 17th, 2018 Posted by No Comment yet

Whether it is a new job or an existing one, you may be asked at anytime to agree to limit where you may work or what clients you may contact after your employment ends.  The question is not whether these “restrictive covenants” are enforceable but what effect will they have on your career.

Legally, whether a non-competition and/or a non-solicitation clause in your contract is enforceable is dependent on a variety of factors such as the nature of your position, whether you were compensated for it, your industry, how you acted upon your exit, etc.  (i.e., restrictive covenants are more enforceable against a CEO then an IT manager given their relative value to the company).

However, the real harm from these agreements is a practical one. Regardless of whether a non-compete/non-solicitation restriction is enforceable,  if you are restricted by such an agreement you are less valuable when compared to others who are not similarly restricted. It is also very unlikely that you will be able to conceal from your future employer that you have signed such an agreement.  Most employers ask their new employees whether they are subject to any such restrictions and/or require you to warrant that you are not before hiring you.  In addition, it is extremely expensive to litigate their validity.  Even if you chose that route, the time period would likely lapse before you got a favorable decision from a court.

CONTACT LISTS

February 14th, 2018 Posted by No Comment yet

It goes without saying that a salesperson’s most valuable asset is his/her list of contacts and connections.  For some, it is an asset built and cultivated over years of networking and cold calling and what separates them from the pack when they interview for new jobs.  Yet, my sales clients have repeatedly put this asset at risk upon taking a new job by uploading their list onto the new company’s computer or cellphone without creating a back-up at home.

Once it is on your employer’s computer there is a real risk you will not get it back if you are terminated.  First, your employer is unlikely to be convinced the contacts in its computer belong to you and are not its very own proprietary information that you developed for it as part of your job.  Without a back-up copy showing what your contacts were before you began working, you will have no ability to establish any proprietary rights in the information.  Second, even if your former employer knew the list was created before you joined the company, why would it return such a valuable asset that it can pass on to your replacement.

NEGOTIATING OUT OF A NON-COMPETE UPON DEPARTURE

January 6th, 2018 Posted by No Comment yet

Non-compete provisions are negotiable even after an employee has spent years working for an employer. Non-competes are negotiable because they are only enforceable in limited circumstances, expensive to enforce and courts will most likely edit their time and scope after the employer has spent considerable money trying to enforce its terms.

An Employee’s ability to negotiate the terms of a non-compete depends on a variety of leverage factors including, the circumstances of your departure, whether you are receiving compensation for the time you are restricted, the type of work you engaged in and your value to, and relationship with, your employer.  A good time to re-negotiate the terms of your non-compete are in conjunction with a severance negotiation.

JUST BECAUSE YOU BUILT IT DOESN’T MEAN IT’S YOURS

October 1st, 2017 Posted by No Comment yet

A common misperception among employees is that if they created, built or compiled information, software or a product at work they are free to utilize it in the future.

This is simply not true even in the absence of a non-solicitation or non-competition restriction.  The general rule is that as an employee, you are paid to do a job and the product of your efforts belongs to your employer. Whether it is developing software code, trading algorithms or compiling names and addresses of clients and contacts, you were paid for your “work product” and therefore it belongs to the company.  When you leave, regardless of the reason, you must leave your “work product” behind either on your desk, in a file or in a hard drive.  You cannot destroy your “work product” or take it with you to utilize for the benefit of yourself or others.

Now that we have the general rule we can look at a few of the exceptions. First, any non-confidential information or personal skills you bring with you remain yours to take when you leave so be smart and do not co-mingle them.  Second, if the information can be recreated from public information you may recreate it on your own time from memory.