Reasons to use employment contracts to protect your trade secrets

Looking closely, one see that most disputes that occur concerning trade secrets are between employers and their former employees. This is because such employees have been with the organization and thus possess invaluable inside information of that company. However, employment contracts can limit the risk that one takes whenever they are disclosing valuable information which may sometimes be a type of a trade secret to the employees. Many people however don’t know the various ways in which they can use these employment contracts in order to protect their trade secrets. Below are some of the common ways that this can be done:

Non-disclosure agreements

This is a kind of agreement which will require an employee in a particular firm to keep trade secrets secret. In general, one also has to be specific as to which type of information that can be deemed to be kept a secret. This is why one has to understand fully all the information that is considered a secret and one which is not. When this is done, then one can be certain to benefit fully from a non-disclosure agreement. In case one doesn’t understand, consulting with a knowledgeable person can help understand better.

Covenants not to compete

This is a kind of an agreement which is signed by an employee and their employer. In this case, it is a promise by the employee that when they leave the company, they cannot work for a competitor for a specific period of time as per the agreement. This will help to curb your employee from revealing your valuable information to your competitors. Whenever you decide to include this kind of covenant in an employee’s agreement, then make sure that it is reasonable. If such covenants will make it impossible for the employee to make a living, then they will not be enforced by a court of law. For this reason, they are supposed to be made reasonable.

Assignment of invention clauses

Even if it is assumed that the trade secrets information which is generated by an employee belongs to a company, it is wise to include that clause in the contract of the employee. This clause should specifically state the ownership right of the employee.

Trailer clauses

This is a clause which will require an employee to assign to the organization any information or inventions which have been developed after they leave. This will help curb the employee from using the trade secrets obtained from their former company in competing with the organization. In general, one has to ensure that this clause restricts the assignments to only include inventions that resulted from the job the employee held in the company. When clearly stated, then these clauses can help curb an employee from leaving the company and then using the trade secrets to compete with their former employer.

Rosie Barnett
Based in Berlin. I love dubstep, kittens and hot coffee.

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