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Case illustrates importance of non-compete agreements

On Behalf of | Jun 15, 2018 | Business Torts |

The importance of a non-compete contracts for companies’ key personnel and executives cannot be emphasized enough. South Florida firms, whose executives, technology, creative and sales leaders are trusted with developing and protecting proprietary business information, should ensure that their interests are protected by requiring all such employees and executives to enter into such contracts. Non-compete agreements protect a firm’s secrets, proprietary information and enterprise knowledge from being shared with or disclosed to competitors.

Just how crucial a non-compete agreement can be was recently illustrated when Ascend Learning, LLC’s chief technology officer (CTO) abruptly left the company. Shortly after his departure, John Wiley & Sons Inc. announced that the CTO would be assuming the same role at Wiley. Probably not coincidentally, a former manager of Ascend had previously left the company to become Wiley’s CEO.

Both companies are in the education publishing business and both develop online learning products. While Wiley has a much broader reach across many fields, Ascend specializes in providing educational and scientific content for institutions and learners in fields that require licenses, such as health care. Ascend contends that the CTO left and took valuable trade secrets with him.

Fortunately for Ascend, the CTO had entered into a non-compete agreement with the company. On June 8, Ascend, a Delaware corporation, filed suit in Delaware Chancery Court alleging that the CTO breached the confidentiality and non-compete agreements that he had signed. While the outcome of the case is far from certain, without the agreements, the company’s case against its former CTO would be much less strong – and much less certain. A seasoned business lawyer can help companies draft and enforce solid non-compete agreements.