Protecting Business Secrets: What Kind of Agreements do You Need
If your business wants to protect its policies, procedures, or special methods, you may have given thought to having some type of agreement that allows you to sue if someone who works for you decides to disseminate your company’s private, proprietary information.
But there are so many different kinds of business contracts that protect so many different kinds of privacy interests. Which do you need, and when do you need each kind?
The Non-Compete Agreement
Perhaps the most common type of agreement, and the type that most people refer to when they think of agreements that protect a business’ secrets, is the non-compete agreement. But strictly speaking, a non-compete agreement doesn’t protect your company’s private information. It just prevents an employee from working for a competitor, or from working in defined geographic areas or defined professional fields.
Of course, these agreements can still benefit a business, as an employee can’t take what he or she has learned while working for you, and bring that information to a competitor.
These agreements are highly scrutinized by Courts, and there are laws that could void your non-compete agreement, if the agreement is too restrictive. No solicitation agreement
If you are looking to protect your company’s methods, procedures, customer lists, or secret information, you will need a non-disclosure agreement. This agreement, by itself, doesn’t restrict where the employee can work, but rather, restricts what information your employees (or anybody who signs the agreement) can disclose both during, and after, they are in your employment.
These documents can be very tricky, because many employees may come into your company with their own customer lists, or with their own set of skills or processes. It should be clearly defined what information is subject to the non-disclosure, and which is not.
Furthermore, courts will also look into whether the information you are trying to protect qualifies for protection—that is, whether you are truly trying to prevent dissemination of something that is secret and proprietary to your business. If not, you will need specific language in the agreement that details the information you are seeking to protect.
Another kind of agreement that protects your business is the non-solicitation agreement. While this agreement doesn’t necessarily protect your processes or the secrets that your business uses to operate, it does prevent an employee from soliciting your clients, customers, or even other employees, when and if the employee leaves your employment. This can prevent a disgruntled or opportunistic former employee from pillaging your business’ valuable employees and customers.
Of course, in many cases, all three of these agreements are often combined into one agreement, and that’s OK. However, there are certain rules about what is acceptable in each one, and what kind of language is needed to protect each kind of interest.
Call us to help you protect your business, or to assist you if you are an employee that is bound by an agreement with a former employer. Consult with our West Palm Beach business litigation attorneys to discover your options. Let our lawyers at Pike & Lustig, LLP, help you. Call us at 561-291-8298 to get a consultation.