Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 2
By Ok. Yesterday you quit your long-time job where you were a key employee. What do you do today? As Tammy Keymon learned in the case of Hamilton-Ryker Group, LLC v. Keymon, you shouldn’t contact the client you worked for on behalf of your old employer and solicit that client’s business (in Tammy’s case successfully).
But wait, you say, you remember that an employee’s duty of loyalty only lasts as long as the employee is employed. Typically, the day after you leave employment, you are free to start competing with your old employer. This is still America, right? Freedom, capitalism, and competition win the day, don’t they? Well, they do unless they conflict with other rights, one of which is the right to contract.
Tammy had signed a restrictive covenant where she promised that for 12 months after her employment, among other things, she would not solicit clients of Hamilton-Ryker. Tammy claimed she should not be bound by the “non-compete” because it did not have any geographic limitation. Tennessee law has been clear for years that to be enforceable, a non-compete must have limitations as to time and geography.
However, the Tennessee Court of Appeals pointed out that in Tennessee, prohibitions on soliciting clients can take the place of the geographic limitation. In short, Tammy could start competing with her old employer the next day, right next door — just as long as she did not call on clients she worked for at Hamilton-Ryker. In this case, the term “non-compete” was a misnomer. Tammy actually was bound by, and violated, a non-solicitation agreement.
Related content
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 3
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 6
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 5
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