Eight ways to guarantee yourself a noncompete lawsuit

A year ago, I wrote a post for employers looking to protect themselves (and their secrets and customer relationships) with noncompetes. (See "Eight ways to lose a noncompete case.") It only seems fair that I should offer something for the departing employees to consider before they leave. (Wait a minute .... Is this helping the other side? No: it's not about sides. See "Rethinking noncompetes.")

If you want to make sure to find yourself on the business end of a noncompete lawsuit, do the following:

1. Take documents. When you take documents with you from your old employer, you cede the moral high ground. Oftentimes, your lawyer needs to argue how unfair it is for the big bad company to prevent poor little you from making an honest living. When you take documents, that whole "honest living" bit starts to sound off-key. To be sure, there's a big difference between taking the secret formula of Coca-Cola (or the secrets to the nooks and crannies in English muffins) and taking a generic business template. Your lawyer might be able to argue that the documents you took weren't really secret, and thus not worthy of as much protection. By why even go there? Don't take any documents, secret or not.
2. Email stuff to yourself. It always amazes me how often seemingly smart people appear to lose the use of their brains when it comes to email. A typical routine for a departing employee is to send email to a personal account from his or her corporate email account. Why on earth do you people think no one's going to catch you doing this? Because no one was next to you when you hit "Send"? Email uses computer networks, monkey boy. Computer networks keep track of stuff — we call it data. When this data shows you sending emails to yourself, people assume the worst — that you're stealing stuff. Don't do it. You will always get caught. And then you will get sued.
3. Use thumbdrives. This is a newer technique for taking documents. Instead of creating an email trail, departing workers use a tiny thumbdrive to make copies of documents and walk out the door with them. Over the years, thumbdrives — which can be as small as a stick of gum folded in half, with a USB plug sticking out of one end — have gotten cheaper, faster, and (in terms of amount of storage) bigger. But what these geniuses fail to realize is that these miniature hard drives have serial numbers, and the computer it gets plugged into often logs that serial number. With some system setups, the employer can see exactly what files were moved between the computer and the thumbdrive. Don't take the chance. Assume that the other side will find out whatever you don't want them to know. Leave your thumbdrive at home.
4. Divert business. Most courts around the country have ruled that it's OK for an employee to prepare to compete before leaving. They have recognized the reality that people don't leave their old jobs until they have something definite lined up for afterwards. Generally, preparing to compete is not itself a violation of a noncompete agreement. But actually competing before you leave is. And it's also a breach of the duty of loyalty that every employee owes to an employer. Diverting business to your new company while still collecting a paycheck from your old one is wrong and unlawful. Even if you know that you're going to miss a golden opportunity, too bad. Don't divert business.
5. Solicit customers before you leave. Related to the last point, it's also a bad idea to talk to clients before you leave. Yes, it would be nice to know that they're prepared to follow you to your new endeavor, but life is about taking risks. If the customer really likes you, they will follow you no matter what. So have faith in them, and in yourself. Don't talk to clients about your leaving before you actually go.
6. Talk coworkers into leaving with you. This also makes employers very angry. They start to worry about a mass exodus, and they start using loaded words like raiding and poaching and piracy. Plus the courts tend to be less sympathetic about Pied Piper departing employees. A court may invalidate a noncompete because the employee's right to ply their trade outweighs the employer's right to have its noncompete enforced. But an employee has no particular right to poach other employees. Leave your friends behind. They can always join you later down the road.
7. Leave disrespectfully. I know, I know. This sounds a little touchy-feely. It's not. This is the product of litigating noncompete and other employment cases for the past 16 years. It's cosmic law: people sue people they don't like. People don't sue people they do like. Burning your bridges on the way out directly increases the chances that you'll get sued. Sure, you might leave in a respectful and grown-up manner, and still get sued; you can't control other people's decisions. But you can reduce the risk of a lawsuit by leaving the right way. Saying things like "I've enjoyed my time here," "I have an opportunity and I owe it to myself and my family to try to pursue it," and "I have no intention of harming you" are all things you can do to lower the chances of a lawsuit. Slamming the door on the way out after cussing out your old boss is a good way to increase the chances of being sued.
8. Act "cute." I see this all the time. People like to play lawyer and come up with "clever" (I'm making finger quotes here), technical ways of getting around their noncompetes. Like having a coworker quit or a customer fire the old employer, waiting a week or two, and then having them join your new company. ("What? They're no longer a customer/employee." I call this acting cute. All it does is make you look guilty. Your former employer will see right through it. The judge will see right through it. I've seen many cases that were lost because the employees acted cute. Don't.

Avoiding these eight mistakes will not guarantee your freedom from a noncompete lawsuit. But it will decrease your chances of getting one, and it will increase your chances of winning it.

Discussion question: What are some other things you've seen people do to buy themselves noncompete litigation? Leave your answers in the comments below.

Comments

[Jay Shepherd]

See Jill Pugh's Employment Law Blog post for two more ways to guarantee a noncompete lawsuit. Nice work, Jill.

[Phil Neujahr]

Jay,

Some great tips here. I love the one about emailing yourself. This has saved me on at least two separate occasions.

[Frustrated]

What if you are an honest employee that had been working for a company for a number of years and had no intentions of leaving along with working very hard to help build the company up. Then a competitor merges with this company. Decreases the selected persons pay drastically along with other finacial loses. Tells only selected persons in the company they have to sign a non compete or lose their jobs to prove their loyalty to them. Then after signing the non compete (who know what it really says, it seems to go in circles)to keep their jobs are fired by with the last statement saying if non compete breeched in anyway (like working in the USA)that legal action would be taken swiftly at the cost of the former employee that is in jeperdy now of losing everything (house,cars credit,etc..) due to inability to find a job in their field from restraints of the non compete. We can not afford to take this to court, nor do we know which state it would go to court in. The contract written by the laws of one state and we reside in another state.
There are still good people out there trying to earn a honest living and believe that is what you are supposed to do. As always there are also two sides to every story.
I do agree that both parties should be careful and protected. I agree there are dishonest people out there on both sides that would be down and dirty. However, there are those of us that practice good moral standards believing what goes around comes around > If you are good to people they will be good to you.
I however am losing faith in HUMANITY, where has it gone?
It should be about right verses wrong.
I apologize for venting, You seem to be a very well rounded indiviual with alot of accomplishments. I am proud for you.
I try to remember that dealing with people what happens not only affects that person but has a domino effect on every person that is connected to that person. So Again I apologize if I offended you in anyway.

[Wise Step]

Huh! never knew that there are these many issues involved while shifting jobs. Your post helped me to take some really wise decisions in the future. Thanks for this great post !

[G. R. Chambers]

Wow, great post. I'm curious. I'm a computer technician. Repair. I am being asked to sign a NC agreement after being with the company for 4 years. Another employee told me they heard the owner say that I am the only tech they ever had that they feared competing against. They said if I want to remain employed it better be signed by weeks end. Any recourse?

[Denzil Dwelle]

I recently left a company with a 'no raiding' clause. One of my former employees at this company applied and was hired for a job under a different manager in my new company. The companies are not in the same industry, and our jobs are not sales or R&D. The former company is now threatening to sue me. Was it my responsibility to keep my former employee from applying to the new company, since I didn't reach out and recruit the employee.

[[email protected]]

If facts are true it doesn't seem they have a case. I would believe your former company has some evidence of what they would sue you for if not why would they risk a counter lawsuite?

[[email protected]]

So, what are you basically stating the employees haveas rights with their uncompensated non-compete agreements?

[chris]

what if you signed a non-compete with a company, and your friend starts the same type of company can you work for them. And what do you do if your old clients want to follow you.

[Jimmy]

Due to their displeasure in old companies performance customer of old company had already reached out to new company (before employee went into negotiations with new company) as there are only a handful of companies in the area capable of servicing them. Employee now working for new company and naturally asked to assist on projects due to pleasurable working relationship with customer. Non-Compete violation?