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Employers may expect confidentiality

Non-disclosure agreements about allegedly torrid events have been in the news very recently. These agreements, also known as confidentiality and invention assignment agreements, are standard parts of employment contracts. The terms of these agreements are intended to stop employees from sharing confidential information about the business, work product and other business information, even if they leave their employer.

These agreements usually have provisions prohibiting an employee from using or sharing confidential information for their own use or gain or for another's benefit without the employer's permission. When an employee is terminated or leaves the business, they must also return the company's property and any confidential information.

Some agreements require an employee to disclose their own inventions and ideas to the company during their employment. The employer becomes the owner of this work product and can reap the profits from this assignment.

An employee is often prohibited from competing with their employer or performing services for a competitor when they are employed with this business. Although an employee may fully comply with these terms, the agreement may not be a guarantee of further employment. These agreements may last long after the employee's last day of work. Many employment contracts contain non-competition agreements that last after their employment ends. Invention assignment requirements may also continue after termination.

These agreements have been widely used by venture capitalists and business startups. A buyer of a business in a merger and acquisition transaction will also expect, as part of its due diligence, that all employees sign these agreements. These agreements may be complicated and various factors impact whether, where and how long they will be enforced. An attorney can help with reviewing these agreements and assuring that the terms are fair and reasonable.

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