Restrictive Covenants: A Litigation Checklist (for Plaintiffs or Defendants)
The following serves as a litigation checklist for both plaintiffs and defendants:
1. What is the legally protected interest the restriction seeks to protect?
- Confidential business information to which employees have access?
- Goodwill created by the employees subject to it?
2. Does the restriction utilize the least restrictive means to protect the interest(s) by being reasonably limited in:
- Scope (how could it operate? against whom? doing what? where?)?
- Duration (2 years or less rule of thumb)?
3. Does the activity at issue actually violate the purpose and terms of the restriction?
4. Has the restriction been waived by:
- Failure to enforce prior breaches
- Failure to maintain information as confidential
5. Does restriction impose undue hardship on employees being restricted?
6. Does restriction violate public policy (as articulated in statutes or court rulings)?
7. Does the restriction contain vague or ambiguous language to create litigation issues?
8. Does the restriction state that enforcement must be undertaken in a particular jurisdiction (state or federal) or venue (county, city or division)?
9. Does the restriction waive a jury or require arbitration or other procedures?
10. Does violation of the restriction entitle the party enforcing it to reimbursement of attorney’s fees or costs?
11. Should/Could other claims be brought with or instead of enforcement of the restriction (through claim of contract breach seeking injunction and damages)?
- Breach of other or implied provisions in the contact
- Tortious Interference claims
- Civil Conspiracy claims
- Unfair Competition claims
- Statutory trade secret claims (federal or state)
- Criminal referral (cybercrimes)
- Insurance claims
Lauri Cleary is a trial attorney who helps businesses, employers, and individuals resolve disputes in and out of the courtroom throughout Maryland, DC, and Virginia. For more information on nonprofits and gift giving, contact her at 301-657-0176 or email@example.com.