Sheila Mason and Craig Shepherd
1. What are the most important issues confronting Sheila Mason? Explain you priority of important issues. The most important issue confronting Sheila is that her previous company, ATS, is claiming she may be in violation of her Employee Noncompetition, Nonsolicitation, Nondisclosure and Development Agreement that she signed when she was hired by the company. The day after she quit she began officially working for her own company, which ATS indicates is in direct competition with its own business. Her agreement with her former employer indicates that she cannot be involved directly or indirectly with another company for a period of one year after leaving ATS that is in competition with ATS. Mason also has another issue with the
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The problem with the NDA is that it cannot prevent the idea from being implement by another party. However, if the idea is implemented it by another party after receiving the information, it gives Mason and Shepherd legal precedence to claim that they acted in violation of the NDA itself which will strongly support their case if they must take the other parties to court. As a VC, I would not consider signing the NDA. This would only create unnecessary costs and complexity for the venture capital firm along with the associated potential legal issues that could arise. The VC would need to hire a team of lawyers solely to ensure they are not violating the terms of the NDA. This would also require them to review their entire investment portfolio to ensure that none of the products they current have a stake in are in no way similar to the product that Mason and Shepherd are presenting to the firm. Simply put, this would create undue problems for the VC that would otherwise be nonexistent. Also, from another perspective, presenting the NDA to a VC would cast Mason and Shepherd in a negative light as it would indicate they don't necessarily understand the VC process. This would deter the VC's from investing in the product even without having to sign the nondisclosure agreement due to the friction it created.
4. What actions do you recommend that Mason and Shepherd take to guard against the appropriation of their ideas in the