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| Risk Management |
| Protecting Your Interests: Non-Compete and Non-Disclosure Agreements |
When Johannes Gutenberg began work on his printing press in the 15th century, no one had come up with the idea of a non-compete or non-disclosure agreement yet. Too bad for Gutenberg. His invention attracted the attention of an unethical businessman named Fust who first sued Gutenberg and seized all of the inventor’s printing equipment, then hired one of Gutenberg’s former apprentices to run the “new” printing business. Gutenberg could only stand back and watch others reap incredible profits.
A little forethought might prevent your business from suffering a similar fate. Employment contracts which prevent former employees from launching a competing businesses, or from sharing proprietary secrets with their new employers are fast-becoming an employment standard. The difficulty with these types of agreements is that if they are not written properly, they are unenforceable in court. [Your company name] is pleased to offer special training to help you make the most of your employment contracts.
Non-compete agreements
A properly written non-compete agreement will contain language which
- limits the geographical area to which the agreement applies
- limits the duration of time the agreement will be in effect
- details the scope of the activity which is prohibited.
Non-disclosure agreements
A non-disclosure agreement does not limit an employee from working for a competitor. Rather, it prevents him or her from sharing secret, confidential or proprietary information that was obtained while working for the former employer. In order to prove your case in court, however, you’ll need to be able to demonstrate that the employee disclosed information he knew was proprietary. Was access to the information restricted in some way? Did the employer require the employee to sign a confidentiality agreement or make use of a special formula or code to “hide the identity” of the confidential information?
We are interested in helping you protect your business interests. Please contact a member of our human resources team for more information about drafting and enforcing non-compete and non-disclosure agreements.
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