Many employers today make employment contracts a requirement for hiring and for good reason. It prevents their employees from creating and developing new ideas, techniques or products while employed at one company and then leaving for another company or to strike out on their own. In California, where technology companies abound, employee contracts are enforceable and employers should do so to ensure their intellectual property is safe.
If your business does not require employment contracts, you should consider making a change. Most employee contracts contain three important areas - intellectual property, non-solicitation and non-competition.
The assignment of intellection property or assignment of invention keeps the company's property the property of the company. It applies to the work the employee does at the office, away from the office on an office laptop and in some cases, even on an employee's off-time.
Non-competition is often the biggest issue for employees who leave to strike out on their own. This means that an employee who leaves to become an entrepreneur can't just start up a business that will be in competition with your company. Most non-competes are in effect for a year and will cover the area where your business operates. With the Internet, though, the geographical region can often be difficult to define. A business law attorney can help in drafting your employee contract in order to ensure it covers everything.
Non-solicitation means a former employee can't try to take your customers or employees with them when they leave or after they leave.
Employee contracts can be a valuable tool in protecting your company and should be used no matter how large or small your company is. For help in creating such a contract that is specific to your industry or workplace, contact a business law attorney.
Source: techcrunch.com, "Launching A Startup? Make A Clean Legal Break From Your Employer First" Stephanie Singer, Jun. 28, 2013