It is critical for an employer to ensure that a non-disparagement provision has been included when drafting restrictive covenants. Sometimes, an employee may, after leaving a company or business, make disparaging comments concerning the now-former employer, which may end up damaging the reputation of this employer. To prevent this from happening, employers should consider including provisions for non-disparagement when drafting restrictive covenants at the point of employment
In our next blog post, we will move the discussion forward by hammering on the concept of confidentiality and why it may be included when drafting restrictive covenants.
New York Law on Including Confidentiality Provisions in Drafting Restrictive Covenants
Entering into a confidentiality agreement is a sober way to plan for contingencies so that you don’t have to deal with them in the courtroom. We also added that, per se, an exhaustive contractual agreement speaks for itself, and, thus, in case problems arise and you find yourself in the courtroom, it will answer all your questions and defend you.
Accordingly, employers should use confidentiality agreements as a way of preventing former and current employees from divulging or misappropriating confidential information or trade secrets. In order to ensure that all the information being sought to be protected has been included, employers should make sure that the term “confidential information” has been comprehensively and appropriately defined. It is crucial for employers to understand that pursuant to N.Y. Lab. Law § 194 of the New York Labor Law, employees cannot be prohibited from engaging their coworkers in discussions concerning wages and other employment compensation. However, under the same statute, employers are permitted to impose reasonable manner, place, and time restrictions regarding when, how, and where employees should engage in such discussions.
Nonetheless, employers should be cognizant of the few carve-outs that are generally a part of confidentiality agreements. For instance, one concerns information that requires being divulged by regulation, statute, or law. Another one concerns information that may, via other ways other than confidentiality agreement breaches, become public. This implies that when it comes to explicitly sensitive information, an employer might consider negotiating for its right to advance an opportunity to object or notice of any disclosure.
In Part XXIX of this series, we will, in our blog post titled “Addressing Discrimination Claims in Signing Contractual Covenants,” discuss how to address discrimination claims that may arise when employers require employees to sign confidentiality covenants at the point of hiring and onboarding employees.
As usual, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always Rising Above the Bar,
Isaac T.,
Legal Writer, Author, and Publisher.
