Litigation Remedies for separating employee without non-compete (New York)

Are there any remedies/reimbursements if an angry former employer brings a lawsuit forward against a former salesrep who went to a competitor (New York) claiming breach of contract and misappropriation of trade secrets and it is found that the salesrep never had a non-compete agreement nor has solicited any business away from his former employer?

1 answer  |  asked Dec 2, 2015 08:04 AM [EST]  |  applies to New York

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Answers (1)

V Jonas Urba
Did the sales rep breach any type of contract? Verbal contracts are still contracts although they are generally more difficult to prove and some are unenforceable.

Misappropriating trade secrets is not the same as asking, urging, or requesting former clients to follow a sales rep, commonly known as soliciting business or clients.

A trade secret is a formula, pattern, device or compilation of information used in a business which would give a sales rep an opportunity for advantage over competitors. If the new employer or other businesses in that sales rep's industry would not have discovered a formula, pattern, device or compilation of information but for the sales reps' disclosure that might be actionable and would depend on the specific facts and the specific industry?

One factor that might overcome the sales rep's motion to dismiss or motion for summary judgment might be the sales rep's new compensation package. Let's assume the sales rep's new compensation is twice what their old compensation was and they are relatively inexperienced in their industry. Did they breach some duty or duties to their former employer to instantly double their compensation?

In federal court, Rule 11(b) and (c) address pursuing matters for any improper purpose or frivolously or without evidentiary support. There are provisions to serve Motions for Sanctions in limited circumstances but such orders are not common and not frequently granted.

posted by V Jonas Urba  |  Dec 2, 2015 10:15 AM [EST]

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