Today’s business environment is increasingly dominated by “know how” assets. It is more important that ever that you protect your most valuable assets — people and proprietary information. Small businesses are especially vulnerable.
Can you imagine what would happen if your lead salesperson walked out the door with her rolodex? Your sous chef with your recipes? Your buyer and her key relationships with suppliers? These are disasters that could undermine the financial health of your business. You can hedge against these potentially catastrophic losses by making sure all of your employees entrusted with proprietary information sign employment agreements.
The key clauses that will give you some peace of mind — confidentiality, non competition and non solicitation.
Confidentiality: To keep employees from walking out of the door with your hard earned secrets, every employment agreement should include a clause that prohibits employees, both during and after their term of employment, from disclosing, or using for their own or another person’s benefit, your company’s confidential information and trade secrets. So long as these provisions are carefully drafted so as not to be vague or ambiguous, they are enforceable in most states.
Non competition: Understandably, courts are very careful about enforcing non compete clauses, as they have the potential to prevent a former employee from making a living. Restricting competition during the term of employment is fair game. But as a general rule of thumb for post-term non compete clauses, any restriction must: (i) be no great than necessary to protect a legitimate business interest, (ii) not unduly oppress the former employee’s ability to earn a living, and (iii) be reasonable in light of public policy (which generally disfavors these clauses). If you want to include a non compete clause in your employment agreements, it is vital to receive legal advice — an unenforceable non compete clause could cause the entire employment agreement to be unenforceable, including clauses that would otherwise have been enforceable.
Non solicitation: When an employee leaves, non solicitation clauses can prevent the immediate loss of other valuable human resources — other employees, customers and vendors. These provisions essentially provide you with regrouping period, during which the departing employee can’t interfere, directly or indirectly, with your current relationships.
Posted by erinaustin 
