To stay ahead of the competition, a Minnesota company often has contracts in place to prevent employees from leaving and becoming the completion. Such a contract is called a non-competition agreement. It essentially says that for a certain period of time, an ex-employee cannot compete in business with his or her previous employer. However, sometimes a company will release an employee from such a contract. Such was the case when Hudson Global encouraged an employee to launch her own business doing what they hired her to do as a recruiter.
The global recruiting firm decided that to cut costs, it would place its focus on legal recruiting and information technology. This decision meant that they would be discontinuing recruiting in the medical device industry, which was performed by their previous employee for 26 years. She was the go-to person in the medical device industry and had built an extensive contact database, which she was granted the rights to take with her to launch her consulting firm.
The ex-employee and now business owner says she never wanted her own business; but when approached with the news of being downsized and the nudge of encouragement from her employer she took the offer. Hudson went as far as replying to previous clients with her new email address and forwarding calls to her. In addition, her former company furnished her with office supplies, furnishings, equipment and even a microwave. All she needed was to purchase her business computer and a desk to place it.
This is a good example of how a non-competition agreement was in place and was complied with until the employer decided to release the employee from the contract. Stories involving Minnesota businesses and their employees don't always result in such a happy ending. Nonetheless, an agreement of this type is necessary can be necessary to help protect a company from potential conflict with an employee who has been privy to sensitive information.
Source: StarTribune.com, "Minnetonka search firm launched with ex-employer's aid," Todd Nelson, Nov. 25, 2012