It's a tale as old as time.
Owner hires someone (employee or contractor). Owner teaches them. They learn all they can from owner which includes client list, vendor list, pricing structure, techniques, and know-how. That someone leaves the business. All of a sudden vendors and clients are leaving the business. Uh oh- that person has jacked all of your clients and intellectual property and you are hemorrhaging cash flow. Owner cries about it because they did not have the employee or contractor sign an agreement when they were hired or being trained. Owner has no legal recourse now.
What if I told you that while you can't prevent former employees or contractors going AWOL and stealing your intellectual property, you can make sure that if they do, you would be able to file an injunction to stop them, recover damages, and file a lawsuit if you had to that would likely stand in court? (Note: all sets of facts are different so make sure you bring your set of facts to a lawyer licensed in your state before taking this informational blog as Gospel).
Let's address some rumors I hear all the time, shall we? After all you guys went hog wild about protecting your pets with Pet Trusts so why wouldn't you also protect your own business?
1. "In Louisiana NDAs are illegal."
Oh sweet summer child. They are not illegal. What you may be thinking is they are unenforceable. Well guess what? That's incorrect too. What often happens is a POORLY DRAFTED NDA is not upheld in a Louisiana court. NDAs must be very, very carefully crafted with precise language depending on whether someone is an employee or contractor and include a lot of things in order for it to be upheld. But it can be done and in doing so can protect a business' backside.
2. "You can't limit someone from working!"
Again, not true. You actually can. For a certain period of time, for a certain set of services or products, and in a certain area. Once again- the fine print matters and any business worth it's salt is going to meet with a lawyer who knows their profession's ethic rules to make sure it's crafted in such a way that it will be upheld if challenged.
3. "How are they going to find out if I took a client or not?"
There's a thing called discovery, subpoenas, and testimony. Not to mention the fact that your phone calls, direct messages, texts, emails, Instagram stories, and Snapchats are not private forever. A good lawyer can get to them. More than that a great employee or contractor agreement will lay out who are considered leads of the business and ask the employee/contractor to provide a list of their pre-existing clientele base. Anyone not on that list but happens to a client of the employee/contractor when they leave when they were a client or perspective client of the business..... well, you do the math.
4. "A potential investor or a potential business partner won't steal my idea."
If I had a penny for every time I heard this one and then that potential investor or potential partner in a business left with that idea, then Tubbs and I could be retired already. It happens. And it happens a lot. You should have potential investors or partners sign a NDA, Non-Compete, Non-Solicitation, and Confidentiality Agreement BEFORE you start disclosing your deepest darkest business secrets. If they won't sign it then let that be a sign you should not be doing business with them.
5. "I don't need all of these documents so I won't do any of them."
In the words of Michael Scott, "Why are you the way that you are?" All or nothing thinking is not going to benefit your business and your precious intellectual property. You can do all of these clauses in one agreement or you can parcel them out individually for what you need dependent on your circumstances.
Before you make any decisions make sure to talk to a licensed attorney in your state about your certain set of facts. There are always nuances in the law and this blog is not meant to be legal advice.
Want to get started with a paid business consultation with Amber & Tubbs? You can shoot us an email to start a conversation or reach out to our Assistant Brielle via phone or text at 985-265-7069 to schedule or get pricing information.
