Albo & Oblon, L.L.P - Arlington/Main Office.
2200 Clarendon Blvd.
Ste. 1201
Arlington, VA 22201
(703) 312-0410
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Albo & Oblon, L.L.P -- Fairfax County Office
6367 Rolling Mill Place
Ste. 102
Springfield, VA 22201
(703) 455-0046
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Albo & Oblon, L.L.P. -- Norfolk/Hampton Roads Office
World Trade Center
101 West Main Street
Ste. 435
Norfolk, VA 23510
(757) 200-7900
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Albo & Oblon, L.L.P. -- Roanoke/Salem Office
113 East Main Street
Salem, VA 24153
(540) 389-4498
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Albo & Oblon, L.L.P. -- Washington, D.C./Maryland Office
641 Indiana Avenue N.W.
Second Floor
Washington, DC 20004
(202) 386-7470
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Q. If our company begins using employment contracts, does it mean that we can never fire employees for poor performance, or for some other reason?
A. In the absence of any contract, most states recognize an "employment at will." This means that the company can terminate an employee for almost any reason. Understandably, many senior employees demand a written contract to give them some security. When a company uses a written contract, the terms of the contract will govern. Therefore, companies need a carefully written employment agreement that provides it with protection, but still allows it to terminate an unwanted employee. In general, companies should include a provision setting forth that the employment relationship is at-will, which will allow you or the employee to terminate the employment relationship, at any time, for any reason, so long as there is no violation of applicable federal or state law. In the event that the company wishes to provide the employee with some assurance of continued employment greater than an at-will relationship, such as with an executive or high level manager, the employment agreement should still contain a list of conduct which would allow the company to terminate the employment relationship.
Q. Does our company have a claim if an employee leaves our company, and we discovery that while he worked for us he was starting a competing business?
A. There may be several bases for a claim, one of which may be derived from a non-compete agreement signed by the employee. However, even with a non-compete agreement in place, an attorney's review is usually necessary to determine whether the agreement will likely be enforceable in court. If the former employee did not sign a non-compete agreement, the company may still have a claim against the employee if he used company time to start his competing business in breach of his fiduciary duty of loyalty. Again, consultation with competent legal counsel is crucial should your company encounter this problem.
Q. What if an employee leaves our company and takes some of our proprietary information with him when he leaves. How do we protect our business?
A. There are a variety of factors that must be considered when protecting your business from a misappropriation of a trade secret or proprietary information. The proactive approach is to have your employees sign trade secret and nondisclosure agreements. Even with this, your legal representative will need to move quickly to protect unauthorized use of such information, and it may be necessary to immediately file an action in court to prevent the use of such information. However, prior to taking these actions, it is best to conduct a thorough, but expeditious, investigation into how the material was obtained by the employee, what specifically was taken and how it is being used to the company's detriment.
Q. I recently resigned from my job, and now I want to start a business that is similar to that of my former company. Can I start such a business? Can I solicit the clients that I worked with at my former company?
A. The answers to these questions depend upon what agreements you signed with your former company. Many times an employee will not recall that they signed a non-compete or other restrictive agreement with their former employer. This puts their status in doubt with respect to starting a new, competing business, or signing on with a competitor. This also puts a competitor business who wants to hire the employee in a difficult position, because they do not know if that employee is bound by an agreement that will prohibit them from competing with the employee's former company or from soliciting the former company's clients.
Q. One of our managers recently left our company to start his own business. While working for our company, the manager was in charge of a large account. When his contact on the account asked why he was leaving, the manager bad-mouthed our company, and we have since lost the account. That account was worth 40% of our business. Can our company sue for the lost revenue?
A. It appears that your employee may have breached his duty of loyalty to the company during his employment. The general legal concept is that employees must prefer the interests of their current employer to their own. While they are employed with your company they are not allowed to solicit future business or interfere with your business relationships. Therefore, your company may be able to sue the former employee for the lost revenue for this breach.
Contact us today for an initial consultation at (703) 312-0410. We are located at 2200 Clarendon Boulevard, Suite 1201, Arlington, Virginia 22201. We also have branch offices in Fairfax County and Richmond.
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