Boston attorney Debra Squires-Lee authored an interesting piece in last week's online magazine CFO.
Ms. Squires-Lee notes that the departure of Boston Red Sox General Manager Theo Epstein, a young wunderkind who helped lead the Red Sox to great success during his tenure, to the Chicago Cubs suggests that perhaps the Red Sox could've done something contractually to limit what Mr. Epstein could and could not share with the Cubs in terms of knowledge generated while with the BoSox.
She writes: " If they did their job right, the senior executives in the Boston club curbed Epstein’s ability to tap into its secrets to create a successful 2012 team in the Windy City. If Epstein was privy to any proprietary, secret, statistical method for analyzing baseball talent, that method could be considered a trade secret. If he uses that method to benefit the Cubbies, the Sox could try to fight its wrongful use, but that would be costly. The expense of litigating a trade-secret case can be game changing. The cost of the lost business advantage if the Cubs start using the Sox’s secrets may be season ending."
What Ms. Squires-Lee does not mention in her piece is the possible use of a noncompetition agreement. These agreements, which limit for some period of time the departing employee's ability to compete in a certain territory, are ubiquitous in many industries and are commonly enforced by courts across the country (with some limitations - California, for example) when they are well drafted and protect a legitimate business interest of the former employer. But this leaves us wondering - does Major League Baseball have a per se rule regarding any club's use of noncompete agreements for important non-performing employees, such as coaches, managers or general managers? We don't know.