Legal Question in Employment Law in Washington

non compete question
We have a unique situation. Our sales manager had a non compete non solicitation employment agreement. She recently left our company and went to work for one of our major clients. As a direct result of this action, our client is using our former sales manager internally to provide the same service we had provided for them for years causing us to lose $75k-$100k per year in revenue. this former employee has directly attempted to solicit employees and sub contractors away from our company. Our non-comp specifically states all clauses in relation to going to work for a competitor. The owner of our company wants to know if there is any actionability based on the fact that this client has now become a form of competitin as a direct result of ths former sales manager going to work for them. The owner of our company would like to pursue legal actin to restrain this former employee from working in her current capacity and receive some sort of compensation for the lost revenue. What are your thought?

Asked on 8/01/07, 11:55 pm

2 Answers from Attorneys

Susan Beecher Susan L. Beecher, Atty at Law

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Re: non compete question

You may or may not have grounds for legal action, depending upon many things.

First, I would need to read the non-compete contract and see specifically what it says. I would need to find out not only whether the contract specifically forbids what the former employee is doing, but also whether the contract is narrow enough that the court will uphold it. (Courts do not like non compete agreements, generally. However, they will uphold and enforce one if it is narrowly tailored.)

If your former employee is using your trade secrets to accomplish what she is doing, you may also have a claim under the Uniform Trade Secrets Act, independent of the contract. You may possibly also have a cause of action against the new employer. A trade secret must be information that has economic value because it is not available by legitimate means, and that your company has made a reasonable effort to protect. Here again, the details matter, but it is worth looking into.

I wish I could give you something more solid than that, but it is impossible without looking at the contract and knowing more details about what the former employee is specifically doing. This additional information will make the difference between whether the $75K or more that you have lost are your damages for breach of contract (or for violation of the UTSA) or simply the fallout of free competition in the marketplace. Considering the amount of money involved, it might be worth your while to have an attorney look over the contract and ask you a few questions.

Answered on 8/02/07, 12:37 am

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