Non-Competition Covenants (NCC), also often referred to as Covenant Not To Compete (CNC), are a basic staple of many standard employment agreements....
Non-Competition Covenants (NCC), also often referred to as Covenant Not To Compete (CNC), are a basic staple of many standard employment agreements. Their aim is to prevent employees from leaving and going to work for competitors (or starting up a competing business) where they may reveal, steal, or exploit confidential trade secrets and know-how in addition to luring away clients and other important professionals for the business in the process.
However, despite a signed and quite straight forward black and white agreement – (former) employees continue to challenge their (former) employers on this front. The blame though is not always with the employee … there are also companies which try to lure valuable employees away in order to gain a competitive advantage. In such instances they will work to find ways to wriggle their new hires out of any restrictions put on them by their former employers. Moreover, employees are frequently transferred abroad in the globalized market and the NCC may not be enforceable in the destination country, making the protection of the employer’s legitimate business interests more complex and difficult.
How can a company truly protect its legitimate business interests if the rules are flouted by both employees and competitors ?