A non-compete contract is the employee's contractual promise to refrain from engaging in business similar to the employer's or from working for an employer's competitor. In a service-driven economy, the ability of a business to protect its investment in human resources, customer relationships, and confidential business information is critical to ensuring continued economic viability. Covenants not to compete provide such protection. With the increase in employee mobility, the globalization of product markets, and the thrust of technology, the need for such protection is more pressing than ever and the use of non-compete contracts is more prevalent.
One area of particular concern to many IT clients when dealing with their employees is the protection of their intellectual property and confidential information. From the perspective of an employer, ideally enforceable provisions protecting a business's intellectual property will be found in the employer's existing written employment contracts and employee handbook. With daily headlines lamenting job losses, layoffs, furloughs, and mandatory unpaid vacations, it would be easy for a business to neglect its long-term intellectual property protection strategy in favor of short-term cost cutting. But it would be wrong. In light of the risk that a terminated or furloughed employee will take steps to compete with the employer, employers would be well advised to audit their intellectual property protection policy, especially as it applies to termination.
The many issues that a company may want to address upon terminating an employee include incorporating intellectual property concerns into its exit process. While the exact procedures may vary depending upon the circumstances, at a minimum a company should ensure that any passwords are changed and that any computers, cell phones, or Blackberries are returned. It may be appropriate to ask that the departing employees confirm in writing that any and all company information and other property has been returned, and that they have kept no copies of any company data. It also may be worthwhile to notify the employee of the information that the company believes is a trade secret, including proprietary formulas, customer lists, or other information. If a business has reason to believe that its employees - current or former - are using its intellectual property to compete, it must act promptly.
Pinsky Law can represents business employers in all aspects of intellectual property law in employment settings, including development of employee handbooks, policies and procedures, employment contracts, labor contract negotiations and arbitrations. We can review and troubleshoot any employment-related contracts our clients routinely use with their workers, such as employment contracts, severance contracts, or releases. We can check contracts to make sure that they contain all the necessary legal terms and will be enforced by a court. If a client included any language that might cause problems later, or if a client have gone beyond what the law requires, we can draw these issues to client's attention. And we can give a client advice about when to use these contracts - for example, a client may not want to give severance to every departing employee or enter into an employment contract with every new worker.
We can draft and review employment
contracts, negotiate executive compensation and other employment
contracts, coordinate union avoidance efforts, and develop stock option
and other equity compensation plans. We can provide technical guidance
on thorny wage and hour issues, plant closings, family and medical
leave, severance programs, and employee disability issues. We take a
proactive approach by conducting client training programs and helping
company managers, human resource professionals and in-house lawyers to
avoid disputes before they arise.