In the world of employment law, one of the most common misconceptions is that, in California, employees move freely between jobs in complete disregard of the concerns that might restrict them elsewhere. However, even in California’s supposedly laissez-faire employment landscape, employees who do not manage their moves carefully can find themselves unemployed and in legal trouble.
Consider the predicament of former “star” Uber engineer, Anthony Levandowski. On May 30, 2017, the New York Times reported that Uber had fired Mr. Levandowski, who was accused of stealing trade secrets from his former employer, Google. Google sibling company, Waymo, was suing Uber, alleging among other things that Uber was using those allegedly stolen trade secrets. The United States District Court for the Northern District of California had ordered Uber not only to limit Mr. Levandowski’s role in the company, but also to do what it could to ensure the return of Google files. Asserting that Mr. Levandowski had not followed its instruction to assist in complying with the Court’s order, Uber terminated his employment. Even in California…
To avoid litigation and minimize liability, new employers are increasingly conditioning initial and continued employment on a “clean and complete” departure from prior employment. For example, new employers are requiring new employees to warrant, inter alia, that:
- they have returned all property belonging to former employers, wherever and however stored;
- they have and will continue to abide by restrictions contractually imposed by prior employment;
- the new employees can and will perform their new jobs without violating such restrictions; and
- they will not bring or use any confidential, proprietary or trade secret information belonging to any prior employer.
Given this shifting and sharing of legal risk, it is incumbent upon transitioning employees to take appropriate steps to protect themselves. Here are some tips on how to do this:
- Locate and read what you have signed – Some employers require employees to sign restrictive covenant agreements, such as non-disclosure, confidentiality, non-compete and non-solicitation agreements. Restrictions may also be included in offer letters, employment agreements, deferred compensation and equity plans and grants, change of control agreements and severance agreements.
- Comply with what you signed, and consult counsel if in doubt – Comply with what you have signed. If you have concerns that doing so creates an impediment to transitioning to new employment, consult counsel regarding legal enforceability and/or alternatives. For example, one scenario is when a prospective employer asks to see your restrictions but the confidentiality obligation prevents your sharing it. Sometimes you can address the underlying concerns by having your attorney speak with the prospective employer’s attorney.
- Anticipate post-departure scrutiny – Upon learning that that you have gone to work for a competitor, your prior employer’s typical first step will be to review your pre-departure emails and computer usage to evaluate, for example, whether you attempted to gather and/or take confidential, proprietary or trade secret information in anticipation of your departure. Assume that anything you do, take or delete on or from a work computer, device or account will be reviewed – and take steps to avoid any issues.
- Take nothing / keep nothing / destroy nothing unless authorized, preferably in writing – One of the biggest challenges for transitioning employees and their new employers are the files, documents and other information that is stored on personal devices and that the employee does not want to surrender. Be aware that, depending upon the circumstance, you may have to forego privacy concerns to satisfy the concerns of your prior and new employers.
- Think before you post – One typical way that issues arise – and escalate quickly – is when an employer learns through social media that a former employee has gone to work for a competitor (or for what the prior employer considers a competitor) in what is described as a potentially competitive role or a role in which confidential, proprietary or trade secret information might be disclosed. Keep this in mind when deciding when and how to post about a new job.
- When issues arise after new employment begins, avoid the temptation to bury your head in the sand or, worse, to implement self-help remedies – Issues almost always arise. They may be awkward but minor, such as a colleague innocently including you on an email chain; or they may be major, such as realizing that you inadvertently retained trade secret information. If appropriate, seek guidance from the new employer; if not, consult counsel.