Most companies possess important confidential information related to their business practices and their clients which can be valuable information to competitors. Employees leaving a company might attempt to take this type of information such as client contact data, bid and pricing information, or other trade secrets when they leave to join a competitor. Having an employment agreement in place with key employees before the employee leaves is critical to protect your business from the risk that a key employee leaves with valuable confidential information and/or attempts to poach the Company’s customers, employees and vendors.
Consider Employment Agreements with Confidentiality, Non-disclosure, Non-Competition, and/or Non-solicitation terms
The law recognizes that employers have a legitimate interest in protecting certain business interests and therefore courts will enforce “restrictive covenants” contained in an employment agreement that generally fall into three categories:
(1) non-solicitation clauses;
(2) non-compete clauses; and
(3) confidentiality/non-disclosure clauses.
When you consult with our Business Law Attorneys, we will counsel you to carefully consider your needs and risks when determining the terms of employment agreements that prohibit a former employee:
- disclosing or using your Company’s confidential information and trade secrets (including, client contact information, pricing or other confidential bid information);
- soliciting your Company’s employees, vendors or customers to leave your company (or cease doing business with your company); and/or
- competing with your Company for a limited period of time within a certain geographic area.
An employment agreement that contains terms addressing, confidentiality, non-disclosure, non-competition, and non-solicitation is a legal contract that employers can have their employees sign either (1) at the start of employment, or (2) after employment has commenced (subject to certain additional requirements). This type of employment agreement can be used with an “at-will employee,” who can still be fired “at-will” without cause at any time. A properly drafted employment agreement defines an employee’s scope of work, job responsibilities, and restricts a former employee from soliciting company clients or employees, or otherwise compete with its’ prior employer.
Every Company's Business is Different
No fill-in-the-blank form (especially those found for free on the internet) will properly address each employer’s specific needs and business. Employers must be careful when drafting this type of agreement as the slightest mistake or drafting error may cause the agreement to be unenforceable. Each state has different requirements and will enforce these types of agreements differently.
At Skufca Law, we counsel our clients as to how the law applies to the enforcement of restrictive covenants in employment agreements and draft agreements for our clients that are tailored to fit each client’s unique needs. Having an employment agreement in place will protect your Company’s legitimate business interest in preserving your clients and retaining key employees.
The attorneys at Skufca Law are experienced in business law and employment agreements that protect the legitimate business interests of a company. To schedule a consultation focused on answering your questions and drafting an employment agreement for your company, contact the business law attorneys at Skufca Law at (704) 376-3030.
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