Professionals in many different industries sign complex employment contracts. Executives, salespeople, managers and even medical doctors often accept employment opportunities that come with restrictions.
Restrictive covenants are common in modern employment contracts. Businesses impose limits on the future economic activity of the people they hire. Many of those professionals may move on after leaving a job without considering the impact of the contract.
However, they may become anxious after receiving a cease and desist letter from their former employer. What happens after companies send cease and desist letters?
The worker could be at risk of litigation
Typically, a cease and desist letter serves as an official warning that one party has violated the rights of another. When a former employer sends notice to a professional, the concern is often that the professional may have violated a non-compete agreement included in their original employment contract.
By taking a job with a direct competitor or starting a business in the same industry, the worker may have violated the terms of the contract they signed when they started their last job. A cease-and-desist letter is an official notice that the company has become aware of potentially infringing economic activities.
If the former employee does not address the issue promptly, they may be at risk of litigation. Their former employer could try to enforce any penalty clauses included in the non-compete agreement. They could ask a judge to issue an injunction preventing them from competing against the business. The former employer could also potentially request damages if there is evidence that the worker’s economic activity affected the prospects of the business.
Reviewing the language of a non-compete agreement is crucial for the protection of a worker accused of violating their employment contract. Professionals who have received cease and desist letters often need to respond proactively to protect their finances and future economic opportunities.