111

Non-Solicitation – Customers

During the Restricted Period, the Employee shall not,

either directly or indirectly as a stockholder, investor,

partner, employee, consultant or otherwise, solicit

business of the same or similar type being carried on by

the Company or any of its subsidiaries and affiliates, from

any person or entity known by the Employee to be a

customer or prospective customer of the Company or any

of its subsidiaries and affiliates 

212

Non-Compete - Broad

NON-COMPETE AGREEMENT. Employee agrees and covenants that

for a period of two years following the termination of this Agreement,

whether such termination is voluntary or involuntary, Employee will not

directly or indirectly engage in any business competitive with Employer

or solicit company customers. This covenant shall apply to any

geographical area covered by any office of the Company or territory that

the Employee worked in within the last two years. Directly or indirectly

engaging in any competitive business includes, but is not limited to, (i)

engaging in a business as owner, partner, agent, consultant, or

independent contractor (ii) becoming an Employee of any third party that

is engaged in such business, (iii) becoming interested directly or

indirectly in any such business, or (iv) soliciting any customer of

Employer for the benefit of Employee or any third party that is engaged

in such business.

313

Non-Compete – More Narrow

Employee agrees that while he is employed by the Company

and during the two (2) years immediately following termination of

his employment for any reason Employee shall not, directly or

indirectly, as an individual, proprietor, partner, stockholder,

officer, employee, director, consultant, joint venturer, investor,

lender, or in any other capacity whatsoever, engage in, become

financially interested in, be employed by or have any business

or professional connection with any business that competes with

the Company in the marketing and/or sales of commercial floor

cleaning services and products in ___________________

counties in Massachusetts, and

____________________________ counties in New York.

Provided, however, that Employee may own any securities of

any corporation which is engaged in such business and is

publicly owned and traded.

414

Non-Compete – Most Narrow

Limitation of Practice; Non-competition: The parties

agree that Employer's business is local in scope and that

Employer would suffer serious damage and loss of

goodwill if, upon termination or expiration of this

Agreement or any renewal thereof, Employee competed

with Employer by providing veterinary services for clients

who reside within the practice’s trade area or currently

are regular clients of Employer. It is understood that the

restrictions contained in this Agreement are necessitated

in part because of the time, effort, and resources required

to acquire Employer’s business, its continued

development and maintenance, and in the event that

Employee’s relationship with the business is terminated,

the additional time and effort necessary to replace

Employee.

515

Non-Compete – Most Narrow

Therefore, as a material inducement to Employer to enter

into this Agreement and pay Employee the compensation

and benefits offered, and in exchange for the professional

education, experience, and training to be obtained while

working for Employer under this Agreement, Employee

agrees that during the period of this Agreement and any

renewal thereof, and for a period of two years  after

Employee ceases to be employed by Employer for any

reason, Employee will not:

616

Non-Compete- Most Narrow

(a) render, offer to render or attempt to render veterinary

services for,

(b) serve as an independent contractor for,

(c) own, manage, operate or control,

(d) be employed by, participate in or have an interest in,

or

(e) be connected in any manner with the ownership,

management, operation or control of,

717

Non-Compete – Most Narrow

Any business or profession, including that of a mobile

practice, engaged in veterinary services similar in scope

to those provided by Employer within a ________air-mile

radius of Employer's practice location(s) during the

twenty-four (24) month period immediately preceding

Employee’s last date of employment.

Employee acknowledges that the following is a non-

exhaustive list of practices/entities covered by this

restriction:________________

818

Additional Provisions

There are certain provisions that should be considered:•Consideration, describe consideration provided at time of initial hire, consider a clause providing that additional consideration is not needed despite changes in position, compensation, responsibilities, etc. •Consider a tolling provision: time for non-solicit/non-compete is tolled during the period of any breach•Provision clarifying that the agreement supplements, rather than replaces, statutory and common law obligations (e.g., trade secret law)•Provision requiring employee and permitting employer to show agreement to potential subsequent employer•Agreement should apply to subsidiaries/ affiliates/ successors/ assigns•Provision reflecting intent to enforce and “blue pencil” if necessary

919

Additional Provisions

• Provision defining the confidential information/trade

secrets at issue

• Provision restricting the jurisdiction/venue for

enforcement (including any claim by employee for

declaratory judgment)

• Consider adding arbitration provision if confidentiality

is a real concern (including right to expedited

discovery and relief)

• Provision permitting a new employer or former

employer to “buy out” of their restrictive covenant (“pay

to play”)

• Provision providing employee with compensation

during the restricted period (“garden leave”)

10110

Additional Provisions – Remedies

Remedies may also be spelled out in an agreement:

•Irreparable Harm - acknowledges that breach will cause

and entitle employer to seek and obtain injunctive relief

•Attorneys’ Fees - if the employee is found to have

breached the agreement, employee pays the cost of

establishing the breach and otherwise enforcing the

agreement, including the cost of any investigation

•Forfeiture - conditions the receipt of certain

benefits/compensation (particularly deferred

compensation) on the promise of non-competition

•Liquidated damages - may simplify enforcement and

litigation

11

HIRING A RESTRICTED EMPLOYEE

12112

The Flip Side – Considerations When Hiring A Restricted Employee• Employees have common law obligation regarding

former employer’s confidential information, irrespective

of whether they have a restrictive covenant with their

former employer

• Employers need to protect against violation of

restrictive covenants and inadvertent “infection” with a

competitor’s confidential information

• “It’s not the crime – it’s the cover-up” – courts act in

equity when issuing injunctions for violations of

restrictive covenants. Conduct such as hiding

information, destroying documents, deleting files are

bad facts for the former employee/new employer.

13113

Acknowledgment of Obligations ClauseI acknowledge that I have informed the Company of, and

agree to provide to the Company a copy of, any

restrictive covenants my former employer may believe or

claim exists between me and my former employer.  I have

also been instructed by the Company not to use,

disclose, upload or otherwise bring to the Company any

of my former employer’s confidential information or trade

secrets.

14

ENFORCEMENT, BRIEFLY

15115

Two Sides Of The Argument

Presumably, no employer wants to steal another

company’s legitimate trade secrets, but there is a tension:

•Former employers want to protect their information and

relationships when an employee leaves

BUT

•New employers want to leverage an employee’s “tool

box” of knowledge and the new employee’s “personal

relationships”

16116

Initial Strategy Issues

Former Employer•What is the employer’s

largest concern? Goals?

•Initial fact gathering

critical.

•Identify trade

secrets/confidential

information at issue

•Any “bad” conduct?

New Employer•Taking the “high road”

early on may minimize risk

(e.g., limit work done by

new employee)

•Proper onboarding may

also minimize risk

17117

Legal And Strategy Issues

Initial handling of trade secret or restrictive covenant

issues often focuses on attempts to get leverage through

legal arguments, including:

•Testing the enforceability of the contract, both as to

whether it is a valid contract and whether it is being

enforced too broadly

•Challenging whether there is a legitimate interest at

issue, or whether the goal is to stop legitimate

competition

18118

Consideration

Former Employer• If contract signed at

beginning of

employment,

employment is good

consideration

• Need to address

subsequent changes in

employment as potential

arguments that

consideration lapsed

New Employer• Acquisition may void, as

may other changes in

the employee’s job

19119

Scope Of Contract

Former Employer•Identify legitimate

business interest

•Narrower argument can

be stronger

•Employee not prevented

from making a living

New Employer•Prohibits ordinary

competition

•Information not “secret’

•Relationships/goodwill

owned by employee, not

former employer

•Time/geography too broad

20120

Litigation

Former Employer•TRO v. PI

•Notice or Ex-Parte

•Need for expedited

discovery

New Employer•Agree to some limitation

and seek full hearing (and

discovery)

•Counterclaims

•Segregating employee

21121

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