Employee Mobility, Competitive Hiring and Unfair Competition

Why Cooley

We understand that a company’s human capital and IP are among its most important assets. Bolstered by decades of experience handling complex employment and IP issues, Cooley’s competitive hiring practice can help you protect your investments in your workforce and your trade secrets without compromising strategic business objectives.

Regardless of where your company’s employees are located, our employee mobility lawyers are equipped to help you draft, audit and enforce the restrictive covenant obligations in your employment agreements in a manner that complies with – and stays ahead of – rapidly shifting legal requirements and restrictions. We leverage our substantial experience advising clients in the technology and life sciences industries to offer creative, effective, long-term protections, often avoiding the need for litigation. Our team also has a successful track record of litigating unfair competition matters in state and federal courts and in arbitration.

Areas of practice

Strategic counseling

We regularly help employers minimize business and reputational risk and prevent unfair competition through a proactive approach to employee restrictive covenant obligations. We also help employers secure confidential information and trade secrets, protecting against potential employee raiding and customer poaching, which can occur when former employees join competitor companies.

Nationwide approach

We leverage our nationwide platform to counsel and litigate issues concerning restrictive covenants, and we are equipped to advise clients on the constantly shifting rules concerning employee noncompete obligations. Our industry-leading approach is based on our extensive experience working with clients who regularly hire and employ individuals throughout the US, as well as the significant resources we dedicate to keeping track of the patchwork of local, state and federal regulations concerning restrictive covenants.

Hiring strategies

We help clients navigate the risks associated with hiring employees with contractual obligations to prior employers – including by implementing appropriate policies, training and strategies to lawfully hire employees from competitors. In addition, we ensure that clients have the right safeguards in place with new hires to protect vital IP and confidential information.

Auditing and investigations

We regularly audit employers’ agreements to ensure adequate existing protections across jurisdictions, investigate alleged exfiltration of confidential information by employees, and help respond to employers’ concerns through pre-litigation dispute resolution or – when needed –court intervention. We also are well-versed in working with in-house chief technology officers, other technical staff and external consultants to identify and evaluate potential misappropriation of confidential information by departing employees.

Employee exits

We assist employers seeking to mitigate the risks to confidential information and IP associated with voluntary and involuntary employee departures. In addition, we have developed strategies for employers responding to key employee departures to make sure that your business interests are appropriately protected.

Forfeiture for competition

Given our work with life sciences and technology clients, we often advise companies that provide employees with generous incentive compensation packages. In connection with protecting employers’ IP and confidential information, we provide contractual remedies allowing our clients to leverage the incentive compensation provided to employees, if those employees engage in unfair competition, or use or disclose confidential information after resigning.

Litigation

If litigation becomes necessary, we move quickly to protect your company’s interests. Our extensive experience in state and federal courts and in arbitration, combined with our deep understanding of the technology and life sciences industries, allows us to gather evidence and persuasively communicate nuanced issues to the court with minimal business interruption. We work closely with industry-leading economic, computer forensic and technological experts – when necessary – to command expedited discovery and synthesize complex issues without compromising quality.

Representative matters

• Defended a pharmaceutical product developer and members of its sales team bringing a new product to the US marketplace in a multijurisdiction litigation alleging unfair competition and breach of noncompete agreements with the former employer of the sales team
• Obtained a temporary restraining order and settlement on behalf of an industry-leading digital experience monitoring service provider in a noncompete litigation barring a former high-level product executive from working in a similar line of business for a direct competitor
• Defended a public digital presence service provider and numerous individual employees in a matter primarily involving allegations of trade secret theft and claims of breach of restrictive covenant agreements
• Obtained an agreement to cease development of a competitive business by a former employee on behalf of a healthcare technology company following filing of litigation seeking injunctive relief
• Obtained an agreement from a competitor to terminate employment of a former executive breaching noncompete obligations on behalf of a data intelligence software provider
• Obtained injunctive relief in the form of an extensive audit of a former executive working for a competitor on behalf of a public cybersecurity company in a multijurisdiction litigation involving trade secret misappropriation and breach of noncompete claims
• Obtained agreement for forensic review of devices and a sit-out period for a high-level sales executive on behalf of a global medical company manufacturing and distributing surgical devices
• Successfully defended a large cannabis producer and retailer against noncompetition and trade secrets litigation filed in relation to the hiring of a lead chemist of a major competitor
• Negotiated a successful resolution on behalf of a business intelligence and market research provider that hired numerous employees from a competitive business who were alleged to have violated restrictive covenants
• Avoided litigation and successfully negotiated a positive result for a medical device provider that hired numerous sales and other employees from a competitor and was alleged to have violated restrictive covenants and retained trade secrets