One of my current vices is the television series Yellowstone, which I’ll admit I was drawn into in a big binge-the-first-3-seasons-in-3-weeks way. For those of you who are not familiar with the show, it centers on patriarch John Dutton and the Dutton family, who for generations have owned the Yellowstone Ranch in Montana on which they raise cattle and a little bit of heck now and again. The Duttons are beset by enemies determined to take—by force or duress—pieces of the tens of thousands of acres of land that make up the ranch. It’s been close a couple of times, but so far, they’ve managed to hang on.
I don’t think I’m spoiling anything by telling you that in fighting their adversaries, the Duttons occasionally resort to techniques that are a little rough and often illegal, usually involving their ranch employees. (No doubt there are some whistleblower issues there, but that’s another post.) The Duttons also have some troubling practices with respect to employee retention. For example, they often burn the Yellowstone brand into the chest of ranch hands they favor and want to stick around. And those who express a desire to leave the Duttons’ employment are often taken to “the train station,” which is a euphemism for a dark cliff on the side of the road in an uninhabited county in Wyoming.
Employers (Montana-based or otherwise) obviously cannot brand their employees and/or toss them off a dark cliff, even in the interest of protecting legitimate business interests such as trade secrets or customer relationships. Employers have historically used noncompete agreements as a means to prevent employees from taking knowledge and contacts they obtained during their time with one employer and using them to help a competitor. But the federal and many state governments have become increasingly hostile toward covenants not to compete (in some cases, effectively prohibiting them altogether), and new statutes, regulations, and other guidance may make enforcement of noncompetes a tricky proposition in many jurisdictions going forward.
That does not mean that there’s nothing left to do but watch key employees saddle up and ride off into the sunset with your trade secrets, customer contacts and data, and half of your sales force. While noncompete agreements that limit post-employment activities may be subject to restrictions that are difficult, if not impossible, to overcome, other provisions such as those governing protection of confidential information, conflicts of interest, and nonsolicitation of employees or customers—assuming they are not simply noncompete agreements disguised as something else—often are not. Employers, therefore, may want to consider updating employment agreements to, for example, strengthen protections for confidential and proprietary information and restrict employees from engaging in employment or other activities during the term of employment that may conflict with the employers’ business interests. In jurisdictions where noncompete agreements have not been eliminated completely, they can still help to protect an employer’s interests but, in light of recent changes to the legal landscape, should be reviewed by counsel to ensure that terms regarding consideration, restrictions (in terms of activities, time, and geographic scope), and interests to be protected are tailored according to applicable law.
We’re a few weeks into season 4, and things look a little shaky for the Dutton crew. But I suspect they’ll circle the family wagons and, with solid business management; less questionable employment practices; and good old-fashioned, bull-headed stubbornness, manage to hang on for another season.
Best wishes to you all for a happy, healthy, and prosperous 2022!