Also known as confidentiality agreements, non-disclosure agreements/covenants mandate that employees keep employer information confidential and cease and desist from disclosing and/or using it. It is critical to note that restrictive covenants are contractual devices that employers may utilize to safeguard their employee, client, and customer relationships, trade secrets, and other proprietary or confidential information, and other competitive interests. In our blog post “The 5 Key Clauses For Every Confidentiality Agreement,” we provided you with the 5 clauses that must be incorporated in every confidentiality agreement between an employer and an employee. Additionally, in the blog post, “Understanding Restrictive Covenants in the Life Sciences Industry,” we mentioned that in order to prohibit the use of proprietary information to the benefit of employees, employers often execute restrictive covenants and, consequently, protect their trade secrets. We also asserted that through restrictive covenants, employees are prohibited and discouraged from engaging in activities that might harm former employers, such as competing against and/or stealing/soliciting clients.
Notably, we also hammered on the Defend Trade Secrets Act (DTSA) and Uniform Trade Secrets Act of 1979 (UTSA) and the statutes’ role in enforcing trade secret protection & restrictive covenants in the blog post “Trade Secret Protection & Restrictive Covenants in Life Sciences.” Most importantly, in another blog post, “Trade Secret Misappropriation & Restrictive Covenant Claims, I,” we asserted that the success and ultimate triumph in most lawsuits significantly depend on how well any party grasps the underlying facts, which is no different in litigations where employers sue former employees for misappropriating trade secrets or violating restrictive covenants. Another key thing concerns the ideology of “adequate consideration,” which is mandatory for a restrictive covenant to be enforced in court. Further, it is also crucial for employers to understand the importance of “seeking full disclosure from candidates,” whereby every hiring employer must make deliberate efforts to understand the potential legal obligations a potential candidate may have to their former employer as a way of avoiding and understanding the full scope of the risk of litigation that arises from a breach of restrictive covenants.
Of most importance, we have a One-stop Shop where you can find and purchase our Confidentiality Agreement (Fully Customizable, Easy To Use).
It goes without saying that employers should, depending on the sector and individual needs, consider making sure that their non-disclosure agreements feature a number of key clauses and essential elements. From a legal perspective, employers should consider these clauses and elements as very critical elements of a confidentiality agreement between an employee and an employer. In this regard, stay tuned for our next blog post and Part II of the series, in which we will hammer on the importance of “Determining what Constitutes Confidential Information” as the first essential element that should feature in every non-disclosure agreement/confidentiality agreement.
In the meantime, stay tuned for more legal guidance, training, and education in other series in progress. 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, & Publisher.
