Maintaining the confidentiality of valuable company information--such things as customer lists, trade secrets, and other proprietary data--can be a challenge, both during the course of an individual's employment and after an employee leaves the company.
To help ensure that confidential information remains just that, and to discourage former employees from using knowledge gained at your firm to the advantage of another employer, you may consider requiring that certain employees sign agreements.
These fall into 3 specific areas:
1. Non-competition agreements, which prohibit them from working for a competitor or engaging in activities that compete with your business
2. Non-solicitation agreements, which prohibit luring your customers or other employees to a competing business; and
3. Confidentiality agreements, which prohibit disclosing confidential information to anyone outside the company or anyone within the company who is not authorized to receive the information.
It’s important to note that these agreements are generally governed by state law; therefore, the validity and enforceability of these contracts will vary from state to state. For this reason, it is recommended that you seek the advice of a knowledgeable employment law attorney when drafting or seeking to enforce a non-competition/non-solicitation or confidentiality agreement.
5 Considerations for Preparing a Non-Competition/Non-Solicitation Agreement or Confidentiality Agreement:
1. Determine whether your company has a valid need for the agreement
2. Decide which employees should sign the agreement
3. Provide a benefit to the employee
4. Keep the agreement reasonable
5. Explain the consequences for breaching the agreement
Although non-competition/non-solicitation and confidentiality agreements can reduce the possibility that a competitor will take advantage of your confidential business information, keep in mind that these agreements should be part of a larger effort to maintain the privacy of proprietary information and protect your company.