As a litigator (courtroom attorney), I am often called when a client has an urgent problem. Whether the client has been sued or simply threatened with a lawsuit, the crisis could probably have been avoided if the client had called sooner. The simple reality is that consulting an attorney before making an important business decision can save you time, money, and a lot of frustration. Of course, it’s impossible to insulate your business from litigation completely. But a trusted attorney can help illuminate the hidden risks—and opportunities—that lie behind the choices your business may face.
For example, many businesses have their employees sign restrictive covenants, or noncompete agreements. These agreements restrict the activities of an employee after she leaves the company. Employers usually require these agreements when a new employee could compete directly with company after leaving—either by going to an existing competitor or by opening her own business. A noncompete agreement typically restricts the former employee from attempting to hire other employees away from the company, opening a competing business nearby, or soliciting the company’s customers. Properly drafted, these agreements are legally enforceable. An employee or former employee who violates a valid noncompete agreement can be subject to heavy penalties.
Many former employees think they should not have to abide by the noncompete agreement. The employer treated them badly, they say, or the customers they worked with are rightfully theirs and do not belong to the company. Feelings like these are understandable, especially if the relationship between the former employee and the company soured before the departure. From a legal standpoint, however, the employee is still obligated under the terms of the agreement.
An employee who does what she believes is right— without appreciating the legal consequences—can find herself in a difficult situation. Employers often move aggressively to enforce noncompete agreements. That can mean attorney’s fees, court appearances, and the possibility of paying the employer monetary damages.
In cases like these, consulting an experienced attorney is essential. The employee can be informed of her rights and come to understand her best options. In some cases, the agreement may be too broad or written in a way that makes it unenforceable. The employee who takes the time to investigate a possible course of action with an attorney will be better informed and may be able to avoid costly litigation.
Consulted in advance, an attorney can also help you set up a new business, form a corporation, or simply protect your interests as you move forward in the business arena. Providing this type of advice is often much less time-consuming—and less costly—than defending a lawsuit that could have been avoided.
