Another essential element that should feature in every non-disclosure agreement/confidentiality agreement entails “Determining the Obligations of the Receiving Party.” Regarding this element, a non-disclosure covenant requires any party that receives confidential information to confidentially maintain and hold such information and restrict its use only for the employer’s benefit and not for any other project/entity or the employee as an individual. Notably, in most states, the obligation of the parties receiving such information is not to use improper means to induce others to acquire the information, not to induce others to breach it, or not to breach the confidential relationship.
To continue with this discussion, this short blog post and Part IV of the series focus on “Determining if there is an Obligation for Company Materials to be Returned,” which is another critical step and element of every confidential agreement between an employee and an employer.
Determining if there is an Obligation for Company Materials to be Returned
As a best practice, employers must also make sure that, during the drafting process, a non-disclosure agreement features a provision requiring the recipients of confidential information to maintain and return the same as per their contractual obligations. In our blog post titled “Hiring from Competitors – Ensuring Employee Left without Incident,” we emphasized the importance of ensuring that potential candidates are separated from their former employers without incident. To ensure this, departing employees should be expressly required, through provisions contained in confidentiality agreements or restrictive covenants, to ensure that they have returned any proprietary and confidential information or any other property in their possession but belonging to the former employer, either within a reasonable/finite duration following their departure or before leaving their job.
Accordingly, we asserted that the hiring employer should ensure and instruct the hire, preferably in writing, that before they can start working with the hiring employer, and as a way of making sure that they do not carry with them any property belonging to the former employer, they should comply with all provisions on returning property. In fact, even in the absence of an express return of property provision, the hiring employer should make sure it has taken this precautionary move.
In a similar manner, confidentiality agreements signed between employers and incoming employees should contain a similar provision that, should the latter be separated, all company materials containing proprietary information or otherwise must be returned, either within a reasonable/finite duration following their departure or before leaving their job. Further, the contractual obligation should also feature a “do not destroy” requirement, which deters receiving parties from destroying certain kinds of confidential information and ensures that, upon separation of employment, the same has been returned. Most importantly, the confidentiality agreement should be precisely clear about the method of returning, the process, and to whom the information should be returned.
Stay on the lookout for Part V, and the last blog post of the series, in which we will hammer on “Determining How Long Information Confidential Should Stay in Possession of the Receiving Party,” which is another critical step and element of every confidential agreement between an employee and an employer.
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.
