Little Rock Attorneys Litigate Noncompete and Nonsolicitation Agreement Disputes

Dedicated advocates protect employees from overly restrictive provisions

Noncompete and nonsolicitation agreements play a vital role in protecting intellectual property from competitors. The surest way to lose a trade secret is to let a separated employee walk out the door with proprietary information or recruit away  coworkers who also know company secrets.

That said, employee noncompete and nonsolicitation agreements are often so restrictive they deny a separated employee the ability to make a living and unfairly limit a current employee’s ability to test the labor market. If you have been presented with a noncompete or nonsolicitation agreement, or you’ve been accused of violating one, you need to know your rights.

How Arkansas law protects businesses in trade secret matters

Arkansas’ Act 921, passed in 2015, has changed the way state courts look at noncompete and nonsolicitation agreements. The Act lists several protected interests of the employer, including:

• Trade secrets
• Intellectual property
• Customer lists
• Customer goodwill
• Knowledge of customer business practices
• Business methods
• Profit margins
• Costs
• Confidential business information
• Employee training methods

To safeguard these interests, employers are allowed to restrict most employees’ post-employment use of proprietary information for a reasonable period and/or within a reasonable geographic area. Two years is considered a reasonable period of time unless circumstances dictate otherwise.

If a former employee is suspected of violating a noncompete agreement, an employer can file a lawsuit seeking an injunction to force the employee to comply with the noncompete and an award for  money damages, including loss of profits. Former employees who steal trade secrets are also liable under federal law.

Legal protections for former employees accused of violating noncompetes

If you have been accused of breaching noncompete agreements, you can rely on numerous defenses, depending on the circumstances:

• Nonbreach — You can present evidence that you have not violated the agreement, but are only using knowledge common in the industry.
• Employer breach — If your employer breached your employment contract first, the noncompete may not be enforceable.
• Unclean hands — If you leave a company because of unlawful harassment or discrimination, or because the employer was behaving dishonestly, the employer may not be able to enforce the agreement.
• Covenant does not protect a legitimate business interest — Although the list of protected interests is extensive under Act 921, it is still possible your former employer was using a noncompete to restrict your options or other anti-competitive reasons rather than to protect a business interest.
• Bad faith termination — If your employer has acted in bad faith in terminating your employment, the court may not enforce the noncompete.
• Overly restrictive terms — A court could find an agreement is unreasonable if it restricts your activity for too long a time or prohibits activity in too broad a geographic area. Courts can nullify agreements whose terms are so strict that it becomes impossible for you to make a living. Act 921 gives judges the power to “blue pencil” an agreement, striking out overly restrictive terms and enforcing the other terms of an agreement.

If you have been accused of breaching a noncompete or nonsolicitation agreement, the consequences to your career can be severe. You should talk to an experienced employment law attorney:

• Before you sign a covenant
• When you know you are going to be separated from the company
• Before doing anything that might be interpreted as a violation
• If you are accused of violating your covenant

The accomplished employment lawyers at McMath Woods P.A. are ready to provide the advice you need to avoid litigation and to protect your rights in court if a former employer accuses you of a breach.

Contact a reputable Little Rock law firm for advice on noncompete agreements

A covenant not to compete or solicit can severely limit your business activity after leaving your current employer. For reliable advice and determined representation on restrictive covenants, call McMath Woods P.A. at 501-502-0985 or contact us online. Our Little Rock office is conveniently located at 711 West Third Street, just three blocks west of Broadway.