Proactive small business owners understand that it is wise to legally protect themselves and their businesses. One way to do this is through the use of employment contracts or employment agreements with key personnel. These documents allow for clear expectations on both the employee and employer, including the term and scope of employment, expected duties, compensation, and other key terms. Increasingly, businesses are including confidentiality, non-compete or non-solicitation agreements in their employment contracts.
What does this mean for employers?
Confidentiality and non-compete agreements are common in the business world, as they provide protection for businesses that expend considerable effort and resources in growing a customer, client or patient base and building goodwill. No business owner relishes the idea of developing a direct competitor from within. As a result, businesses desiring to protect trade secrets, maintain ownership of intellectual property, and avoid competition from within their own ranks often use confidentiality, non-compete and non-solicitation agreements. The contracts must clearly and carefully define the limitations on employees both during the employment period and afterward, and must also comply with applicable law and specific statutory guidelines (in Georgia and other states). Accordingly, the agreements should be prepared and reviewed by business attorneys experienced in this area of law.
What does this mean for employees?
An employee should carefully read any confidentiality and non-compete agreement she is asked to sign, whether before or after the employment relationship has begun, and should also seek legal advice about the scope and legality of the agreement. Intellectual property can be a particularly sticky area. Take the example of the 2012 Domino’s case involving the company’s former Director of E-Commerce, James Vitek. During Vitek’s employment, he was asked to sign a non-compete agreement that, among other things, would have transferred all of his work and inventions to Dominos, including anything created on Vitek’s own time and having nothing to do with his work for Dominos. When Vitek refused to sign, he was terminated and he sued the company over stock options and other benefits. Perhaps litigation could have been avoided through careful negotiation seeking to appropriately modify the employment agreement by carving out inventions and work having nothing to do with Dominos or its business?
Whether an employee or an employer, it is helpful to know that business and employment contracts are in place to make expectations clear from the start. If you are a small business owner, and would like assistance from knowledgeable and experienced Atlanta business law attorneys, do not hesitate to contact Brownstein & Nguyen. Our experience as business litigation lawyers in Atlanta provides us with invaluable insights and unique perspectives to draw upon when advising clients regarding employment and other business agreements.
