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Wednesday, June 29, 2011

Non-compete agreements and legal settlements

By Pankaj Ladhar of Manos • Alwine P.L.

For many businesses one of the most valuable assets is the knowledge and relationships of their employees. This can include specialized knowledge of the industry, knowledge of trade secrets and pricing information, and the relationships that the sales staff has with the company's customers.

Businesses invest significant resources in developing their employees' knowledge base. Having done this many businesses require non-compete agreements to ensure that the knowledge that they have worked so hard to develop will not be used against them by a competitor when an employee leaves the company. But attempting to enforce a non-compete agreement is easier said than done, often these dispute lead to lawsuits by businesses to protect their investment and market share.
On the other side of the coin is an employee who may have specialized skills an education that make it likely that they wilt ay in the same industry when they leave their position. An employer will generally not be allowed to unreasonably restrict an employee's ability to secure gainful employment.

The Florida business AutoNation recently decided to settle rather than litigate a non-compete agreement with a former sales manager. The sales manager went to work for a competitor to the online car sales business, Edmunds.com.

AutoNation and the former sales manager agreed that the manager would abstain from engaging in the buying or selling of any online sales leads in Georgia, Alabama, Tennessee or Mississippi though the middle of August. While sometimes business must litigate in order to protect their interests, many times the parties to a dispute like this one can engage in constructive negotiations to come to a legal settlement that allows both parties to move forward.

Source: South Florida Business Journal "AutoNation settles non-compete suit" Paul Brinkman, June 28, 2011


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