Non-compete agreements offer a way for a company to protect itself, but it is not uncommon for former employees to breach these agreements.
Recognizing the signs of a breach is necessary for businesses to take appropriate action.
1. Similar business activities
When a former employee starts engaging in business activities that closely resemble those of their former employer, it raises suspicions of a non-compete violation. This includes providing the same products or services, targeting the same clientele or adopting a similar business model. Such similarities could harm the original company’s market share and revenue.
2. Soliciting former clients or coworkers
An employee who reaches out to the company’s previous clients or coworkers to promote their new venture may be infringing on the non-compete agreement. This kind of solicitation could divert business from the original employer, impacting their relationships and profits.
3. Use of confidential information
Another strong indicator of non-compete violation is the unauthorized use of confidential information. If the former employee uses sensitive data, such as customer lists, trade secrets or business strategies, for their own gain or to benefit a competing entity, it poses a direct threat to the former employer’s competitive advantage.
4. Social media activity
Social media is a popular way to promote businesses and connect with clients and partners. A former employee’s online presence can offer valuable insights into their activities. If they start actively promoting a competing venture on their social media profiles, it could be a clear sign of a non-compete violation. Monitoring their online behavior can help detect early breaches.
Approximately 18 percent of workers sign noncompete agreements, helping business protect their interests. When you spot potential breaches, it is important to remember that enforcing non-compete agreements can be a complex process