When hiring a new employee, employers often don’t adequately consider the “end” of the relationship and how important that can be to the future of their company.
When hiring an employee, it is important that, as part of the hiring process, the employer consider having the employee sign both a non-competition agreement and a non-disclosure agreement.
In the recent decision in, Scientific Corp. v. Lee, the U.S. District Court very clearly addressed the issue of whether a non-disclosure agreement alone will include the elements of a non-competition agreement. The court very clearly determined that there will be no assumption of the employee’s “inevitable disclosure”, and that therefore the employee was free to go to work for the competitive company.
The employer in this case, Boston Scientific, cited the 1995 U.S. District Court decision, Marcam v. Orchard, as support that an employee working for a new company will inevitably give away confidential information in their new position. However the Judge was not persuaded in this case, citing to the facts that there were differences in the employee’s new role and noting that there was no evidence provided that would suggest that the employee had actually disclosed any protected information.
The recent decision suggests that, absent a well-drafted non-competition agreement, the employer may actually have to wait for the confidential information to be divulged before bringing an action, such as an Injunction, which the plaintiff unsuccessfully attempted to use in this case.
