Dive Brief:
- A Manhattan appeals court has ordered the former employee of recruitment firm Major, Lindsey & Africa to pay the company more than $2.7 million after it alleged she stole trade secrets and aided the competition, the New York Law Journal reports.
- Sharon Mahn, a recruiter for the legal industry, has been ordered to pay back her compensation from her four years at the firm, amounting to $1.77 million, plus more than another million in attorney fees and costs and interest. The appeals court upheld an arbitrator's ruling on the issue, saying that Mahn was a “faithless servant" as defined by state case law.
- An attorney for Mahn, however, says they'll appeal the ruling. Mahn told the Law Journal that “as the legal market has become more saturated and competitive, [these] lawsuits have increasingly become an almost common occurrence.”
Dive Insight:
Mahn may be right that we're seeing more of these suits, especially when high-level corporate recruiting is involved. Industry leader Randstad recently filed a similar suit against three employees who set up a competing staffing firm while still employed by Randstad.
In addition, while noncompetes are typically difficult to enforce, employers who do so to protect trade secrets may find some success. In some states, the practice is banned, but it’s estimated 18% of American workers are covered under some form of non-compete agreement.
Noncompetes must be implemented properly, however. They generally need to balance employers' needs with those of its workers, and companies often have to show that violation of the agreement would cause them substantial harm, experts say.
