In the first days after a key employee, or any employee with access to a company’s sensitive or proprietary business information, leaves to join a competitor, employers must quickly decide how to respond. In these situations, certain questions frequently arise, including:
- Does the employer have the appropriate restrictive covenants in place (i.e., non-competition, non-solicitation, and non-disclosure agreements)? And, if so, is the employer’s non-competition agreement enforceable under the applicable state law?
- Has the employee misappropriated trade secrets?
- And, as is often the case in the first days after an employee leaves for a competitor, if the employer cannot yet show actual misappropriation, do the facts and law support a claim for threatened misappropriation, or what is known as “inevitable disclosure” (i.e., that the employee’s new job duties are so similar to those performed for the former employer that they will inevitably result in the use or disclosure of the former employer’s trade secrets)?
The answers to these questions will depend not only on the facts of each case, but also on state law. Laws governing the post-employment conduct of former employees vary significantly by state, with some states providing employers substantially more protection than others. The attached chart provides a quick reference guide to these laws, as of the date of this publication.