Company: $8.5M commercial concrete contractor.
- Employees had open access to confidential information such as customer pricing, relations and data, without having noncompete agreements in place.
What Wasn’t Working:
- Employees within the company had access to all of the customer data including pricing, contacts, estimating and sales programs and did not have confidentiality or non-compete agreements in place, leaving the company vulnerable to disclosure of confidential information to competitors should an employee change jobs.
What was done:
- Moving forward all employees at the time of hire were required to sign a confidentiality agreement along with a noncompete agreement. This demonstrated to the employees that the owner was extremely serious about the data that employees were given access to was valuable to the future success of the company. Although the noncompete agreement is sometimes difficult to enforce depending on the state laws, it communicates to the employee and potential employer that should the employee under a new employer inflict damages to the company, it would take legal action to recoup any damages against not only the employee but also the new employer.
- The company was able to take legal action seeking damages against a former employee and their new employer because the former employee had taken customers based on the knowledge that they received during their employment. Although the company could not prohibit the employee from going to a new employer, it could seek damages incurred due to the violation of the employees non-compete agreement. The action demonstrated to current employees that the company was very serious about confidentiality and about recovering damages should they occur.
- Intellectual Property is an asset of the company and must be protected to reduce the risk of loss. The use of confidentiality agreements and non-compete agreements are tools that employers can use to mitigate the risk, because the loss of that data could result in lost business and in increased competition.