Worse than the companies that fail to use appropriate agreements are the companies that have no program whatsoever for protecting themselves against unfair competition or the theft of their trade secrets. Consider this: your key salesperson goes to work with a competitor. He takes nothing with him, but since he's dealt with all of your customers, he solicits many of them and they stop doing business with you. Without an agreement or some kind of program in place to protect yourself, you have no recourse. And other employees start following him. This obviously leads to a bad outcome. A non-compete agreement is critical, but so is enforcing it against the first person who tries to breach it. If other employees know you mean business, they won't try the same thing.
Wish I Would Have Known #4: I wish I had better protected information I consider confidential.
Just because you say something is confidential does not make it so. There are three key questions to ask yourself about any information you wish to protect:
(1) Where is the information kept?
(2) Who has access to the information?
(3) Is the provided to customers, vendors, suppliers, or any other third-party?
If the answers to these questions show broad access to your company's information by many people, it's time to develop a better confidentiality policy. Limited access to information that is kept under lock and key is more likely to be considered a trade secret than information that is widely disseminated and, therefore, more likely to receive court-ordered protection. Here are some rules of thumb that will give you a good start:
Information about pricing, suppliers or vendors that is given to customers is not
Information that you allow employees to take home or access from their personal
computers is probably not secret.
Information that doesn't truly belong to you is not secret. For example, if you are
a distributor of a product, the product is not secret as to you. Maybe the
customers you sell to or your profit margins are secret (and that's a BIG maybe!),
but nothing about the product itself is secret. Another example that I'm seeing
frequently is information that belongs to a client of an outsourcing company. If a
business outsources its IT work, the deliverable that is created by the outsourcing
company is based on the customer''s information. Maybe the methods used by t
outsourcing company are secret (again, a BIG maybe!), but the outsourcing
company has no ownership in the information in the first place.
Wish I Would Have Known #5: I wish I had lived by the agreement.
Some clients do everything right: they have solid, enforceable agreements in place and they diligently protect their confidential information. But then they commit the gravest of sins: they don't follow the agreement they are seeking to enforce. The law is clear that he who breaches the contract first cannot enforce it. So, if a "for cause" employee is fired without cause, for example, that employee will likely be free to go compete against you, regardless of any non-compete clause in his agreement. Other common employer breaches include failing to compensate a departing employee, either pursuant to his agreement or under the law, and failing to follow buy/sell provisions with a corporate shareholder.