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Kevin O'Flaherty

In this article, we explain some of the most important clauses for employers to include in employment contracts and independent contractor agreements. We explain non-compete clauses, non-solicitation clauses, trade secret clauses, confidentiality clauses, and non-disparagement clauses in the context of protecting an employer's interests through employee and independent contractor agreements.

Non-Compete Clauses in Employment Contracts and Independent Contractor Agreements 

A non-compete clause prevents the employee or contractor from owning or being employed in competing businesses during and after his or her employment with you.    The rule of thumb is that, in order to be enforceable, a non-compete clauses should only cover geographic areas in which you are actually or reasonably expect to be doing business, and should only cover types of business activities that would actually compete with your business. 

Non-Solicitation Clauses in Employment Contracts and Independent Contractor Agreements

A Non-Solicitation Clause prevents the employee or contractor from pursuing your employees, business partners, and clients after their employment.  Unlike a Non-Compete Clause, it does not have to be narrowly tailored in geographic scope in order to be enforceable. 

Trade Secret Clauses and Confidentiality Clauses in Employment Contracts and Independent Contractor Agreements

A Trade Secret or Confidentiality Clause prevents the employee or contractor, during employment or after their termination, from using or sharing your business information, such as marketing strategies, proprietary business systems, customer lists, and customer information. 

Non-Disparagement Clauses in Employment Contracts and Independent Contractor Agreements

A Non-Disparagement Clause prevents the employee or contractor from tarnishing your business' reputation during or after employment.  

All of these clauses should be drafted by an attorney, because whether or not they are enforceable will depend on the care taken to draft the language of the clause itself.  ​

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.

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