How to Handle the Exit of Employees Who Have Non-Compete Agreements

Any time an employee leaves a business, the departure has the potential to be disruptive. When the employee had access to confidential or proprietary information, or if the employee has a non-compete agreement, it can be particularly troubling.

To minimize the chaos and work that can remain in the wake of an employee’s departure, employers can take these steps to prepare.

Conduct an exit interview

If possible, employers should conduct an exit interview with their departing employee. These interviews can help management understand a person’s reason for departure. They can also be a good opportunity to recover company property and tie up loose ends.

However, there are situations when an exit interview is not feasible. This can be the case when employers terminate an employee, effective immediately.

Discuss the details of the agreement

Before the employee leaves, voluntarily or not, remind the employee of the terms of his or her non-compete agreement. If the employee already has a new job, you can also discuss the potential conflicts.

Have a copy of the signed agreement available for review and make sure the employee understands the ongoing obligations.

Contact the new employer

If the employee is leaving for a new position, employers might contact that party to inform them of the employee’s non-compete agreement. Getting in touch with the new employer can also allow you to confirm the employee’s new job role and responsibilities and ensure they do not violate the agreement. Be careful, however, to keep the conversation limited to this topic and to avoid discussing the employee’s performance with your own company.

Secure protected information

Even if you have no concerns that the employee will take or copy proprietary information, it is vital to protect it.

When any employee leaves, regardless whether the employee quit or was fired, employers may want to change passwords, collect company equipment, and escort the employee out of the building.

Taking these steps after an employee’s departure – and sometimes prior to the exit – can be crucial to enforcing a non-compete agreement. While disputes with the departing employee can still arise, these measures can go a long way toward preventing the loss of sensitive business information.

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