As much as we plan and prepare inevitably an employer will find itself involved in a dispute over a non-compete. Once you have determined, or have a good faith belief that a former employee is breaching a non-compete, what should you do? In those cases typically the next step will be to engage legal counsel to send a demand or “cease and desist” letter to the employee. In many cases this signals the beginning of the end of the dispute and can serve as an effective and efficient method of wrapping disputes up quickly.
A well-drafted demand letter contains an accurate summary of the contractual, statutory and common law restrictions that bind the former employee, a summary of the facts showing that the former employee is in breach of his or her non-compete, a description of the harm suffered or potential harm the employer may suffer as a result of the former employee's breach of duties, and a demand for specific actions and written assurances. This process should happen as soon as is possible after you identify the break, both to protect your reasonable business interests as well as to support any future enforcement actions.
In many non-compete situations, it is also appropriate at this stage to send a separate demand letter to the former employee's new employer setting forth the facts and arguments as to why the new employer's engagement of the former employee will unlawfully interfere with the non-compete between the former employee and old employer. Cease and desist letters must convey the message that the former employer takes the former employee's continuing obligations seriously and will not allow its goodwill, trade secrets or confidential information to be unlawfully misappropriated. These letters are a critical tool because many non-compete situations are resolved by settlement following the exchange of the cease and desist letter and response.
Contact Hance Law Firm at (952) 236-1453 for a free initial consultation.