Confidential Information, Assignment, and Noncompetition Agreement (Employment Agreement)
The term Employment Agreement can refer collectively to any legal document or set of legal documents that set forth the terms and conditions of a person's employment with a company. As founders start a company, it is important for them to make sure that they put in place the proper protections regarding their employees. Companies generally want to ensure that any information provided to employees is kept confidential, that any inventions created on company time or with company resources become the property of the company, and that employees cannot take key information from the company and immediately use it to compete with the company. The employment agreement we use with all of our standard documents includes these provisions.
These provisions are important for the following reasons:
- Protection of Company Intellectual Property (IP). Company IP generally constitutes the core of the value of the company. If an employee can take confidential information from the company and sell it or use it to compete with the firm without recourse, the company could be a significant risk of losing value or failing.
- Protection against Competition. The non-competition agreement bars employees from competing directly against the company for some period of time generally 1-2 years. While these contracts are not always enforceable (for example Non-Competes are unenforceable in California), they can provide protection in most states against a common problem that seriously harm new companies. This problem often arises after your company has spent time and money training an employee only to lose him or her to a competitor or to a startup that will compete with you.
- Rights to New IP Created with Company Resources. These documents also give the company rights to new IP that is created by employees with the company's time or investment.
Video
Invention Assignment Non Comp Conf At Will