One of the most challenging times in a person’s life is when they are separating from an employer. When the separation is not the employee’s choice, it can prove to be one of the most difficult periods in one’s life. The emotions of fear and uncertainty, the concern about your source of income, the effect on yourself as well as any other family members all rise to the top of the priority list.
Many people describe the period just after being “let go” as feeling as if they are in a daze or fog. Unfortunately, there is no more important time for an individual to be clear-eyed and focused. What you do in the hours and days immediately following your separation are critical to your confidence, sense of wellbeing, and the status of your career, along with the reality of your financial viability.
The issue often raised during an employment separation is the status of a severance or separation agreement. While of great importance, the severance agreement is not the only agreement of consequence in the separation process. Agreements known as non-compete and non-disclosure agreements often come into play in the separation process. Trouble is, most employees have forgotten that they ever signed an agreement, certainly don’t remember its contents and, more often than not, have misplaced their copy of any such agreement.
For the general public, such agreements are often called non-compete agreements. However, within the general “non-compete agreement” there are a garden variety of other agreements that can face the separation employee.
First, there is such a thing as a non-compete agreement. It’s generally designed to stop an employee from competing with their former employer. There are lots of rules governing whether a non-compete agreement is a binding agreement but they do exist. Almost always, in order to be binding, the non-compete section must have a limitation of a reasonable period of time and reasonable geographic limits.
Second, there are a non-solicitation agreements, which can govern customers, other employees or both customers and other employees. There are non-disclosure agreements that include such items as trade secrets, customer lists. Finally, there are confidentiality about business practices and business financial information.
And, of course, there is always the issue of what happens when there is a disagreement regarding these type of agreements. Disagreements can, and often do result in litigation, and that litigation can not only involve the employee and the employer, but can also involve the employee’s hiring company. Issues such as “tortious” interference with business relationships and breach of contract claims are often at the center of such lawsuits.
Finally, your new employer may want you to sign similar agreements upon accepting your new employment.
In the next few newsletter editions, I will discuss each type of agreement, the circumstances that produce such an agreement and when it is important to get professional help with negotiating these agreements.
Involuntary separation from an employer is never pleasant. It is critical to understand the legal issues that could occur, so that when you are faced with an involuntary separation from an employer, you will know what issues deserve your focus and attention. You can assure the best situation for you, your family and your career armed with some basic facts about non-competitive agreements and their possible ramifications.