McNamee Hosea News & Press


Non Compete Agreements Could Dictate Future of Businesses

There are multiple ways in which a contract could be used in an employment situation to benefit both parties. Employers might use a non compete to protect their business from things such as employees sharing trade secrets. Though generally signed at the start of the employment relationship, they do not go into effect until an employee no longer works for the employer. A salon business with locations in Maryland, recently took legal action based on this premise.

 Hair Cuttery filed a lawsuit against Regis Corp., after seven “key employees” left the former business to work for the latter. According to the owner of Hair Cuttery, Regis is trying to run him out of business. He said it is seeking to do this by appropriating trade secrets –including the training he provides employees on becoming part of the business’s “family culture”—and stealing key employees. One of the recent employees to leave, an 11 year veteran, he characterized as a “superstar.”

In the lawsuit Hair Cuttery is seeking to enforce a non-compete agreement that star employee signed while working for Hair Cuttery. It is also seeking damages totaling $5 million.

Hair Cuttery asserts the exit of the seven employees has resulted in its corporate playbook being placed in Regis’ hands. The owner also claims it has created a work environment that is unstable and has made thousands of remaining employees afraid about what will happen in the future.

How this case will be resolved remains to be seen. However, it illustrates the importance of talking steps to protect one’s business.