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A Guide to Help Businesses with Non-Compete Agreements: Through The Eyes of A Private Investigator

Non-compete agreements can often end up being one of many sheets of paper in that thick stack of HR documents that you flip through excitedly before starting a new job. But for an employer or business owner, these are important, binding agreements that protect their intellectual property, a critical component to an organization’s success!

Naturally, when any form of a business’s intellectual property is at stake – whether it’s a trade secret, copyright, or another form of proprietary information – their success is jeopardized, which is why non-compete agreements are both necessary and legally enforced. Here is what you need to know about the importance of non-compete agreements, and how business owners can prevent and respond to violations with the help of a Private Investigator Team.

What is a Non-Compete Agreement?

In short, these legal documents prevent employees from building their own business using your trade secrets or leaking proprietary information to a competitor. A legally binding contract ensures that employees, should they leave your company, cannot join a competitor for a specific time period. Non-compete agreements also protect sensitive company information that can be exploited by an employee to form their own business.

Examples of non-compete transgressions are:

  • Client poaching
  • Theft of trade secrets
  • Slander the existing employer
  • Divulging the details of special training programs
  • Sharing client lists
  • Exploiting existing client relationships
  • Revealing confidential business information

Non-compete agreements are also an important tool to prevent employee poaching by competing businesses in return for a lucrative pay-raise. The problem, however, arises when an employee violates the agreement. For this reason, in your best interest to take measures to prevent and quickly respond to non-compete violations; Private Investigators can help!

Preventing Non-Compete Violations

Even though internal human resources teams have great influence over their workforce, they often lack the expertise or resources to conduct comprehensive background checks to uncover if something suspicious is lurking in a candidate’s past. Licensed Private Investigators are armed with the experience and legitimate in-depth background screening tools to pull criminal and financial history or identify patterns in their work history or lifestyle that may serve as “red-flags” for an employer.

In some instances, even before a non-compete violation has been suspected, a thorough corporate investigation (that may include an “undercover boss” operation) may reveal behavioral patterns or activities suggesting that a non-compete violation has taken place.

“As part of an undercover corporate investigation to pinpoint sources of missing company revenues, one of our Private Investigators secured video evidence of a corporate manager having sneaky lunchtime meetings with investors for his new business venture, charging the lunch on his company card. To add insult to injury, he was using company resources – such as his work computer and printer – to develop plans and promotional material for his side gig, while on company time…all in direct violation of his non-compete agreement”.

Adrianne F. | Director, Star Quality Private Investigations Toronto

When a Non-Compete Violation Takes Place

Should you suspect a violation of a non-compete agreement, your first instinct might be to contact your attorney or law enforcement. Regardless of how tempting it may seem to catch the offender red-handed, this may not always be the wisest course of action. Approaching this situation, the wrong way may have the opposite effect of causing even more harm to your company, potentially eroding your profits.

If you decide to send a cease-and-desist letter to the suspected violator, will send the warning signal that you’re on to their deceitful behavior, and in an effort to avoid punishment or legal repercussions, they’ll either go underground or put their plan on hold. This puts a serious dent in your ability to gather sufficient evidence of the wrongdoing, impacting the strength of your legal case.

There’s a possibility that despite your warning, an offender may continue to leak proprietary information in secret. Without ample evidence, you will not be able to recover your damages legally. Moreover, if the former employee contends your claim by accusing you of harassment, the situation can turn pretty ugly. For this reason, your first response should be reaching out to a trusted Private Investigation Agency to uncover the evidence you need before taking any other action.

Choose a team with a proven track record in undercover corporate investigations; this team of experts will use a combination of open-source data mining, interviewing of witnesses, and surveillance to secure objective and professional time-stamped evidence that can be used within a court of law or any other governing body. A non-compete investigation will not only provide you with the evidence you need to build a winning case and recover any economic damages, but it can also help you see the full picture more clearly:

“You’d be surprised how many times our PIs have investigated a non-compete violation of a lone individual, only to discover through our surveillance, that there is in fact a full team of employees discreetly working against the employer. Once you have our team on the case, there is no hiding. We’re able to expose it ALL, saving you time and the potential of more lost intel and revenues down the road”.

Adrianne F. | Director, Star Quality Private Investigations Toronto

The Bottom Line

Non-compete investigations can be effective as a preventative or reactive response to ensuring that sensitive company information remains where it should…within your company! As a proactive measure, Private Investigators can perform an in-depth risk assessment of all potential employees.

Should there be a violation of the non-compete agreement, Private Investigators should be your first reactive response team to help you gather necessary evidence, prevent any more trade secrets from being disclosed, and build an airtight case against the offender. More importantly – saving your business from a potential fallout in the event of a non-compete crisis!

For more information on Non-Compete Violations and Investigations, reach out to Toronto’s leading Corporate Investigation Team at Star Quality Private Investigators Toronto!

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