Confidentiality agreements in the context of employer-employee relations can prove to be most beneficial after an employee’s employment with a company has come to an end. For instance, SolarCity Corp., a company based in California, recently filed suit against a former employee and her new employer, SunPower Corp., a direct competitor of SolarCity Corp., alleging that she stole confidential and proprietary customer information and trade secrets, which she then used in her new position with SunPower Corp. SolarCity’s position is that its former employee’s actions are plain violations of the employment and confidentiality agreements she signed with SolarCity Corp. while an employee.
Though it may not always make sense to pursue legal relief from former employees who breach a confidentiality agreement or a confidentiality provision contained within an employment agreement, it is worth preserving the right to do so by drafting and having all employees sign an employee confidentiality agreement that details what information is to remain confidential both during the course of an employee’s employment and thereafter. Confidentiality agreements can also be utilized if your company relies on the work of independent contractors or even in the context of vendors or other service providers who may utilize confidential company information and/or trade secrets during the course of their work on behalf of the company. It is important to note that confidentiality provisions may be contained within a larger employment or independent contractor agreement, and need not be a standalone agreement to be effective.
If you would like to understand how a confidentiality agreement might benefit your company or how to integrate confidentiality provisions into employment, independent contractor agreements or client service contracts, please contact Your Contract Lawyer’s office for a consultation.