In Bank Business News, Tory Summey and David Pardue co-authored an article about navigating noncompete and trade secret disputes.
“In today’s historically tight, churning labor market, banks and financial institutions are more frequently facing questions and litigation over restrictive covenants (such as noncompete agreements) and trade secrets,” they wrote.
“With an unemployment rate in the finance industry of 1.3% in August, it is almost certain that the talent you are looking for already has a job,” they continued. “Moreover, many banks require at least their higher-ranking employees to sign restrictions on working for competitors, soliciting customers, and disclosing confidential information. But when banks are faced with a departing employee and want to act on those restrictions, some are finding that the ground beneath them has shifted in terms of what courts will or won’t enforce.”
“There are several steps banks can take to better protect themselves against unfair competition in this labor environment, including updating restrictive covenants and adopting good HR practices to properly onboard and offboard employees,” they wrote.
“Additionally, when a dispute arises, banks should consider several factors when developing their legal strategy to make sure it is consistent with the best interests of the business,” they continued. “Even with the law is on your side, company leaders must take into account practical considerations before suing a former employee, competitor or customer who has taken talent or trade secrets.”
You can read the full article here: Practical Tips for Banks in Navigating Noncompete and Trade Secret Disputes