It is not uncommon for a Minnesota business to have tools in place to protect trade secrets. A non-competition agreement is one such tool that many companies require employees and independent contractors to sign. This is a binding contract that says that after employment ceases an employee or independent contractor cannot, within a certain time frame, work for a competitor or disclose confidential information. Sometimes having this type of agreement does not deter the action that it was intended to prevent. In this case, a company has the right to involve the courts to seek resolution.
An example of this happened recently when a company that makes computer processors sued at least three former employees for allegedly taking confidential information when they left the company. The company accused the former employees of transferring over 100,000 files electronically. The sensitive files included information about strategies involving licensing agreements and other processes concerning new products. In addition, it is alleged that the ex-employees tried to recruit workers from the company.
The company is seeking monetary damages as well as an injunction to stop the employees from further disclosure. A temporary restraining order was enforced by the U.S. District Court. The accused were ordered to honor the non-competitive agreement and to refrain from disclosing confidential information and from attempting to recruit employees of the company.
Protecting confidential information is often crucial to a company's success. This case presents a good example of how having a non-competition agreement in place works in favor of the Minnesota company that enforces one. Any business owner who wishes to draft such an agreement may find it beneficial to consult with someone who is knowledgeable about commercial and business law.
Source: Bloomberg, "Advanced Micro Devices Sues Ex-Workers Over Trade Secrets," Don Jeffrey, Jan. 17, 2013