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COVID-19: How Is it Going to Affect Non-Compete Litigation?

As of May 8th, the U.S. economy lost 20.5 million jobs and the unemployment rate reached 14.7%. Needless to say, there will be millions of people looking for jobs this year. Many of them – 1 in 5 according to pre-COVID studies – will have non-compete agreements with their former employers.

Both employers and employees are wondering how COVID-19 will affect the litigation of non-compete disputes around the country and whether the courts will be more or less likely to enforce such agreements in light of the nationwide health emergency and the drastic economic downturn.

I have no crystal ball, but based on the trends that we are already seeing, here are my predictions as to how COVID-19 will affect the litigation of non-compete agreements around the country:

BOTTOM LINE:  Albert Einstein once said, “in the midst of every crisis, lies great opportunity.” There will be plenty of employees looking to take advantage of the COVID-19 changes in the workplace and competitors looking to pick up talented employees who have been laid off, furloughed or placed on a reduced salary and looking for a change.

Therefore, businesses should remain vigilant about the protection of their confidential information and make sure that the decisions regarding lay offs, furloughs, reductions in salaries or benefits, and roll outs of work-from-home policies are all made with a clear understanding of how they will affect the enforcement of non-competition agreements with key employees and the protection of the confidential information.

Leiza Dolghih is the founder of Dolghih Law Group PLLC.  She is board certified in labor and employment law and has 16+ years of experience in commercial and employment litigation, including trade secrets and non-compete disputes. You can contact her directly at leiza@dlg-legal.com or (214) 531-2403.

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