Many businesses in California have a vested interest in protecting their trade secrets. Information ranging from proprietary manufacturing processes to supplier lists can give an organization a competitive edge and help it remain profitable.
Whenever organizations bring in new workers, there’s always the possibility that those workers will take what they learn at the company and then use that information for personal gain. For example, workers could go on to start a direct-competitor organization or they might take a job working with a competitor.
California does not enforce non-compete agreements, so employers have limited options for avoiding such unfair competition. However, non-disclosure agreements or confidentiality agreements could potentially help a business avoid unfair competition. Such agreements are important inclusions in modern work contracts and may help a company fight back against unfair competition.
What does enforcing a nondisclosure agreement involved?
There will typically be two main stages in a company’s effort to enforce a non-disclosure or confidentiality agreement. The first stage will involve documenting the alleged infraction.
Proving that a former employee has contacted multiple clients or that the company that hired them has since started duplicating their former employer’s recipes will be a crucial starting point for the enforcement effort. After all, the business that will become the plaintiff in the case must establish that there was a breach of the agreement.
Then, they will need to prepare to go to court. Many breach of contract claims involving employee misconduct settle outside of court. However, the former employee may not agree to compensate their former employer for their misconduct or to cease engaging in certain behaviors after an alleged breach of a non-disclosure agreement.
If the settlement isn’t possible, then a judge can help. Judges can issue injunctions that prevent an individual or business from continuing to engage in certain behavior. Judges can also order specific performance, effectively requiring that one party complete certain actions to compensate the other. Finally, judges can also award damages when there is evidence that an employee’s disclosure of protected information caused financial harm.
Effectively, businesses need to verify that any suspected violations of any particular agreements have actually occurred. Then, with the assistance of an experienced attorney, a business can start building a case to go to court even if they hope to settle the matter. Ultimately, understanding how to enforce employment contracts can help businesses that are struggling with the impact of a former worker’s disclosure of key company secrets.
