Seeking Recovery for Breach of Restrictive Covenants: Damages, Injunctive Relief, and Beyond

Recording of a 90-minute CLE video webinar with Q&A

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Conducted on Thursday, April 7, 2022

Recorded event now available

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Course Materials

This CLE course will guide employment counsel in seeking recovery after a current or former employee breaches a restrictive covenant--whether that is a covenant not to compete with the employer, a non-solicitation of the employer's employees or customers, or a nondisclosure agreement regarding the employer's trade secrets or other confidential information. The panel will also discuss circumstances in which the breach of a restrictive covenant implicates the fiduciary duty of loyalty and potential resulting harms from which the employer can recover.

Description

When a current or former employee breaches restrictive covenants in an employment agreement, such as a noncompetition, non-solicitation, or nondisclosure agreement, the employer may often, depending on the jurisdiction, pursue injunctive relief, damages and other forms of relief against the employee. Quantifying the harms and finding the right kind of recovery for the breach can be challenging.

Listen as our authoritative panel discusses strategies and best practices for employers to pursue damages against a current or former employee and his new employer following a breach of a covenant not to compete, solicit, or disclose confidential information. Our panel will offer drafting strategies to give companies the most robust platform for enforcing their contractual and fiduciary rights.

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Outline

  1. Potential causes of action following the breach of a restrictive covenant
    1. Breach of covenant
    2. Breach of the fiduciary duty of loyalty
  2. Pursing injunctive relief
  3. Pursuing damages from the employee and new employer
    1. Lost profits damages
    2. Clawback compensation
    3. Restitution
    4. Goodwill impairment damages
    5. Liquidated damages
    6. Royalties
  4. Pursuing other forms of relief
  5. Recovery under Defend Trade Secrets Act of 2016
  6. Tips on drafting enforceable restrictive covenants

Benefits

The panel will review these and other high priority issues:

  • What types of damages may employers pursue when a current or former employee breaches a restrictive covenant?
  • How does the Defend Trade Secrets Act of 2016 address damages for disclosing trade secrets?
  • What are the methodologies to establish damages? How are they different from jurisdiction to jurisdiction?
  • When can and should an employer go after a former employee's new employer for damages for breach of a restrictive covenant?
  • What remedies and damages are available when the wrongdoing occurs outside the U.S.?
  • How can employers draft enforceable covenants to maximize potential damages and equitable remedies?

Faculty

Coleman, Jesse
Jesse M. Coleman
Partner
Seyfarth Shaw

Mr. Coleman assists clients with breach of contract and general business tort litigation. He has handled numerous trade...  |  Read More

Weibust, Erik
Erik W. Weibust
Member
Epstein Becker & Green

Mr. Weibust represents clients in commercial litigation matters, including franchise, distribution, and real estate...  |  Read More

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