As a result of technological advances and greater employee mobility, many employers are growing increasingly concerned over how to protect confidential and proprietary information, including the way they do business. Former employees, contractors and consultants are sometimes approached by competitors seeking information about the employer's business. The employer should consider requiring employees, consultants, suppliers, licensees, customers and any one else who might be exposed to trade secret information to sign written Non-Competition, Anti-Solicitation and/or Confidentiality Agreements.
Non-Competition Agreements are difficult to enforce unless they are entered into as part of the sale of the goodwill of a business; the sale by a shareholder of all of his or her shares in a corporation, or a sale by the corporation of all or substantially all of its assets together with goodwill; or the dissolution of a partnership, disassociation of a partner from a partnership, or sale or other disposition of a partner's interest in a partnership. However, a Non-Competition Agreement can be enforceable if the covenant is necessary to protect the employer's trade secrets.
Employers may also use Anti-Solicitation Agreements to protect a former employee from raiding other employees or customers. Such agreements must be reasonable in scope.
Employers may also wish to consider utilizing Confidentiality Agreements to protect and preserve trade secrets or the way the employer does business. These agreements are valid to the extent that they are reasonable and protect only legitimate trade secrets and confidential information.