Klein & Wilson

Basic considerations with proprietary information agreements

If you are starting a company or are considering hiring employees for your burgeoning enterprise, maintaining secrets and inspiring innovation are important. However, in today’s marketplace, employees come and employees go. In this environment, companies must protect their trade secrets and products that they produce from being poached by disgruntled employees. One way to do this is to have new employees sign agreements acknowledging ownership of proprietary information and ownership of intellectual property while in the employ of the company.

These agreements have a number of different names, including: Employee Confidentiality and Assignment Agreement, Employee Intellectual Property Agreement and Proprietary Information Agreement.

Regardless of the name, such an agreement should accomplish the following:

-          Put the employee on notice that all intellectual property created during the course of employment is property of the company, or in other words “work for hire.”

-          Informs the employee that all inventions created during employment are assigned to the company absent a separate agreement

-          Create a covenant between the employee and the company to keep proprietary information confidential.

Additionally, such an agreement should be very clear about prohibitions on soliciting employees upon termination of the employee-employer relationship, as well as the duty to return all company property when the relationship has ended. Further, the agreement should have a reminder of company ownership of emails and other digital communications.

If you have questions about how to fashion a proprietary information agreement for your employees, an experienced attorney can answer your questions.

The preceding is not legal advice. 

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