Ex-Employers Enforcing Agreements

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If you signed an employment or non-compete agreement with your previous employer, either as a condition of employment or in exchange for a severance package, better check the details before starting a new job. Nowadays, companies are taking steps to protect client lists, intellectual property and trade secrets when they see former staffers sign on with a competitor.

Enforcement of these agreements vary by state, the specific language of the agreement and each situation. This means every laid-off worker must do their homework in order to know their rights and limitations.

On his blog on InjuryBoard.com, attorney Dan Frith warns Virginia workers about signing non-compete agreements in exchange for severance pay.

Many terminated employees are provided a "severance package" of benefits. Say, one month's salary and benefits BUT they are asked to sign a non-compete agreement in return for the severance package. Be very, very careful if you are asked to sign a non-compete agreement.

Each state looks at non-competes differently, and my home state of Virginia has its own approach to the legality and enforceability of these agreements. In Virginia, if the agreement is reasonable in terms of geographical scope and duration (length of time) most courts will enforce the agreements.

In Charlotte, N.C., Bank of America is sending letters to former employees as GMAC gears-up local hiring. Reporter Mark Boone from NewsChannel 36 references the advice of a local attorney in an article on the station's Web site.

Steve Dellinger, a Charlotte attorney specializing in employment law, said contracts which include disclosure agreements are common for top sales people, executives, and technology employees who have access to sensitive information about their company.

Companies will often remind employees about the contracts when a worker with proprietary information leaves their job, Dellinger said. With thousands of recent layoffs, businesses are especially concerned about company secrets getting into the wrong hands, he said.

Disputes involving former employees and the leaking of trade secrets to a competitor can lead to a lawsuit, Dellinger said.

In some cases, a judge can order ex-workers to pay damages to their former company, he said.

Dellinger suggested anyone with an employment agreement review the contract carefully before taking a new job.

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