The restaurant business can be a volatile work place. In many cases chefs move about and come and go from establishments. While this is just the nature of the business, it does pose a significant problem, and one that has grown significantly in recent years, intellectual property disputes. In the last five years, courts have seen an uptick in intellectual property lawsuits between restaurants and the chefs they employed.
In many of the current cases, dining establishment owners have waged war against the chefs they've formerly employed, claiming all recipes created during the chefs tenure with the restaurant are the property of the restaurant itself. It appears a common theme that chefs utilize skills and ideas gained ato one eatery, and replicate them at their next endeavor, whether it is their own restaurant or a new restaurant gig. Experts argue that this happens so frequently because the laws regarding this type of intellectual property are not exactly cut and dry. With that being said, however, there are some things restaurant owners can do to protect their recipe and, by proxy, their entire business.
Who Owns the Recipes?
Who owns the recipes can be murky water, even legally. A chef could potentially argue that because he or she created the recipe from their own knowledge, it is intellectual property, and thus they have a right to recreate that recipe wherever they choose, specifically in a business they now own. On the other hand, a restaurant owner can argue that any recipe created during the chef's tenure with the business is the property of the business, as the creator of that recipe was fairly and justly compensated for their time and talents.
While the legality of the issue can be murky, there are some things that business owners can do to protect themselves. In fact, legal experts have long suggested restaurant owners beat the intellectual property lawsuit to the punch by drawing up legal expectations. Not only does this cut down on the potential for former employees to go elsewhere with recipes, but it makes the legal procedure much more cut and dry if it does come down to that.
Protecting the Recipes
Legal experts suggest using contracts, non-competes and non-disclosure agreements to ensure all recipes that are created at the eatery stay there, even after the chef has moved onto a different job. Contracts should include a clause that all recipes created in the restaurants kitchen, during work hours are the property of the restaurant, as the chef has been compensated for his or her time and ideas.
A non-compete agreement, a common agreement in the business world, is simple an agreement that the signer will not move onto a competing business when their tenure with the company expires. For example, a person that works as an executive for Coach handbags would be bared from moving onto another handbag retailer for a specific amount of time (traditionally six months to a year). The same can be done for a restaurant. This protects a business from having their higher ups with intimate knowledge of the business from being poached by competing businesses.
Finally, non-disclosure agreements ensure that the employee can not, legally, share insider secrets of the day-to-day business of the restaurants with others, including a new employer. Signature recipes are included under this definition, as they can be considered “trade secrets”.