A recent case from the North Carolina Business Court provides insights to employers and employees about issues that may arise when enforcing non-compete agreements and confidentiality agreements involving trade secrets. The Court’s Order and Opinion describes a case of both types of agreements that were allegedly violated. Still, the Court decided the claims for and against each party for instructive reasons. Here is a link to the written decision: Barings v. Fowler, et al., 2025 NCBC 6.
Factual Background
In March of 2024, 22 members of Barings LLC's Global Private Finance group resigned simultaneously to join Corinthia Global Management Limited, a new competitor. The Plaintiff Barings alleges that Corinthia orchestrated this mass departure in collaboration with Ian Fowler (a top Barings executive) and Kelsey Tucker (Barings' former head of global operations). According to Barings’ allegations, Corinthia began recruiting employees of Barings as early as August 2023, collecting post-dated resignation letters by December 2023, months before the planned mass resignation. The employees allegedly delayed their resignations to collect year-end bonuses and gather confidential information before departing.
Barings’ filed its lawsuit including numerous claims against the Defendants, including breach of contract (the non-compete), misappropriation of trade secrets, conspiracy, breach of fiduciary duty, interference with contractual relationships, and other business torts.
Employer Challenges in Non-Compete Enforcement
Employers face significant practical challenges in enforcing non-compete agreements. In this case, as in many others, employers often struggle to obtain concrete evidence of violations. Employees typically conduct competing activities discreetly, making it challenging to document specific instances of violations or misconduct. Furthermore, in this digital age, proving the transfer of confidential information can be particularly difficult, as employees may use phones, tablets, cloud storage, or other methods that leave minimal traceable evidence.
Here, the Court dismissed claims against Fowler and Tucker, which exemplify this challenge – while suspicious activities were alleged, Barings struggled to provide the specific factual support required by court rules. Claims against the competitor-company Fowler and Tucker went to work for, Corinthia, were supported by more specific allegations and, therefore, satisfied the Court’s standards.
An Employee Perspective on Non-Competes
From an employee standpoint, non-compete agreements can create career advancement and economic mobility barriers. These agreements can prevent skilled professionals from obtaining better job opportunities, potentially leading to wage suppression and reduced innovation. In the financial services industry, as illustrated in this case, non-competes can limit the natural flow of talent and expertise that often drives market efficiency and innovation. They can also create artificial barriers to entry for new companies, potentially reducing market competition and dynamism.
Trade Secret Claims as Alternative Employer Strategy
Notably, the case demonstrates how employers can use trade secret misappropriation claims as an alternative to non-compete enforcement. Courts strictly construe non-compete agreements, and if any provision is too broad or too vague, the non-compete can be ruled unenforceable. To be enforceable, a non-compete agreement must be reasonable in scope, duration, and geographic reach, while trade-secret claims merely require showing that confidential business information was misappropriated. Courts do not construe confidentiality or trade-secret claims so favorably toward the employee. Evidence of any violation may allow the employer to file a lawsuit and obtain an injunction against any further use of its trade secrets by a former employee or a competitor.
Strategic Implications for Employers and Employees
For employers, this case underscores the importance of having robust evidence of specific violations when seeking to enforce non-compete agreements. The case also demonstrates how employers might strategically pursue alternative claims, such as trade secret misappropriation, which often have more favorable standards of proof. For employees and competing businesses, the case highlights the importance of carefully documenting compliance with contractual obligations and maintaining clear boundaries when transitioning between employers. The decision ultimately reflects the complex balance that courts in North Carolina are required to strike between protecting legitimate business interests and maintaining healthy market competition while ensuring that restrictions on employee mobility are reasonable and well-documented.
Dye Culik represents employers regarding business matters, including non-compete agreements and trade secrets violations. We also represent key executives and managers in the same issues. Contact us and mention this article for a complimentary consultation about your business.
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