Losing an employee to a competitor is a challenge that many businesses face. When several members of your senior team leave for the same competitor, it may point to a targeted effort rather than routine turnover. If you suspect that your employees are being poached, you might be wondering what form of recourse you can take.
Leveraging non-compete and non-solicitation agreements
A non-compete is a contract clause that prevents an employee from joining a direct competitor or starting a rival venture for a set period after leaving your organization. For the terms to be enforceable, it should meet the following requirements:
- It protects a real business interest such as client relationships or private knowledge
- It is fair in both duration and geographic scope
- It does not apply to workers earning at or below 150% of the state minimum wage
Non-solicitation agreements can also prohibit former employees from actively recruiting your staff or pursuing your clients after they leave. If your current agreements lack these terms, it may be worth consulting with counsel about whether updated language could better protect your business.
Recognizing when poaching becomes trade secret theft
The Maryland Uniform Trade Secrets Act provides businesses with civil remedies when an outside party acquires, shares or exploits trade secrets through improper means. Private data that might qualify for this protection can include:
- Client rosters containing specialized data not readily ascertainable by competitors
- Internal strategic plans, financial forecasts and growth targets
- Custom methods, formulas or software unique to your operations
Aside from the above, your organization must demonstrate that it kept reasonable measures in place to protect it. Without documented safeguards, such as signed agreements, proving trade secret status in court becomes a much harder task.
Exploring legal options
One of the paths you can take to protect your company is to initiate litigation and seek a temporary restraining order or preliminary injunction to prevent further sharing of sensitive data. However, you must prove that your business will suffer immediate, irreparable harm if the court does not intervene.
A tortious interference with contract claim can also apply if a competitor knowingly encouraged your employees to breach an existing agreement. If departing employees did not have formal contracts in place, the focus can shift to a claim for tortious interference with economic relationships instead.