You may not have to hire an attorney to respond to a cease and desist letter you’ve received from a former employer. But it may be a good idea to at least consult with a lawyer that practices in the trade secret, employment restrictive covenants, non-competition or non-solicitation space. Your ability to earn a living in your chosen occupation is at stake. Think of what being without a paycheck for a period of time would be like.
WHAT IS A CEASE AND DESIST LETTER?
Employees that have signed non-competition agreements, non-solicitation agreements or even confidentiality agreements with their former employers, may receive a cease and desist letter from their former employers or their attorneys if they have started to work for a business that competes with their former employer. You can read more about this topic from our previous blog posts here, here and here. An employer sends a cease and desist letter if it thinks the former employee is working for a competitor, or stealing customers, or may inevitably disclose confidential information to their new employer.
Often the letter arrives certified mail, or via federal express, or may even be served by a state marshal or process server. The latter is a bit overkill. It is sent in one of these ways to prove you received it, and for affect. Mostly, I think, affect. Everyone knows certified mail means something important is inside and a cease and desist letter is important.
WHAT SHOULD I DO IF I GET A CEASE AND DESIST LETTER?
First, don’t ignore it. Second, read it. Sounds simple right. Third, check your files to see if you even signed an agreement keeping you from competing with or soliciting customers from your former employer. Typically, the cease and desist letter will include a copy of the agreement. Make sure it’s the same one you signed.
Next, determine whether you are really doing what the letter accuses you of doing. Are you working for a true competitor? Are you doing the same type of work for your new employer as you did at your older employer? Are you soliciting (like really going out and calling on) your former employer’s customers? Just announcing you have joined a new company – even if it is a competitor – is not soliciting.
WHAT CAN AN ATTORNEY DO TO HELP ME?
Reading an agreement like this isn’t difficult. Reading it and ANALYZING it under the current state of the law in your state is what a lawyer is trained to do. Different states have different rules governing whether these types of agreements are enforceable. Connecticut says they can be enforceable if they are reasonable, in time and geographic scope. 1 year and 30 miles from your former employer’s location may be fine for a non-compete agreement depending on what type of work you did. Two years and a worldwide restriction probably isn’t enforceable unless your former employer has worldwide customers. New York law requires the former employee’s work to be “unique,” meaning something pretty special. Just being a salesperson likely doesn’t meet that test, but research and development in a medical specialty probably does. Massachusetts has specific rules governing non-compete agreements, as does Connecticut governing physicians and, get this, security guards. The analysis under any state law is a fact-intensive analysis. If your former employer didn’t take reasonable precautions to protect what they are claiming are trade secrets, you may have a good defense to any lawsuit.
You may also know through the grapevine whether your former employer ever sues employees based on a non-compete or non-solicit agreement. WHETHER YOUR FORMER EMPLOYER WILL SUE YOU ALL COMES DOWN TO HOW MUCH YOUR CURRENT EMPLOYMENT COULD FINANCIALLY HURT YOUR FORMER EMPLOYER, BY SAY, TAKING CUSTOMERS FROM THEM.
So, you don’t have to hire a lawyer. But understanding the rules as explained by an attorney may give you some real comfort as to whether you should ignore it (usually not a good idea) or respond in writing. I have seen situations where the employee ignores the letter and never hears from the former employer again. But I have also seen situations where the employee responds in his or her own and includes information that comes back to hurt them.
Be careful and think seriously about it. You are at risk of your current employer terminating you if they think it might get sued also. Think what’s best to protect your livelihood. If they end up suing you, they will go to court seeking an injunction, which is a court order restraining you from working for the competitor or calling on certain customers. Those proceedings are expensive, happen relatively fast, and typically include an evidentiary hearing which is a mini-trial. If the order gets entered, you may not be able to earn a living at that job.
Know your rights, and make an informed decision whether to engage an attorney to respond to the cease and desist letter for you.