You Escaped from Corporate? Legal Issues to Consider
Even in a world where employee non-competes are generally not enforceable, two major issues come into play when you start an expertise-based business using the expertise you acquired from your corporate job (which most of us do):
Use of Trade Secrets: If you have a competing business, your former employer will assume that you are using trade secrets that you learned through your job. While the knowledge and skills that you gain as an employee (such as how to use a computer program) are yours forever, you are not permitted to use the trade secrets of your former employer without their express permission. Trade secrets include any non-public information that provides a competitive advantage to your former employer, such as customer lists, sales scripts, and market research.
Ownership of Intellectual Property. Generally, your former employer owns all rights in the intellectual property that you created in the course of your employment. This applies whether or not you had an employment agreement. For example, if you were a human resources director and part of your job was to create a policy regarding diversity, equity, and inclusion in the workplace, your employer owns all intellectual property rights in that policy. Yes, after going out on your own, you can market your services as a DEI expert. No one can take away the knowledge you gained during your employment. But your former employer owns the exclusive rights to copy, distribute, sell, license, and make derivatives of the policy you wrote for them as their employee.
In sum, using the non-public information or materials of your former employer without your former employer’s permission is illegal.
Perfect examples for asking, “do you own what you think you own?” If you aren’t sure, Ask Erin.
Cheers! 🥂
Erin