Business owners often fret over the loss of competent and essential employees, fearing that these individuals will take with them business trade secrets and other intellectual property. Fortunately, there are several things business owners can do to protect confidential business information and retain good staff.
Three Documents that Protect Business Interests
Several documents can help businesses protect and retain their intellectual assets when employees move on:
- Proprietary Information Agreements: When part of the hiring package, proprietary information agreements help protect trade secrets and other confidential information. They typically require employees to return company property, prevent them from recruiting other employees for other business ventures and assigns the company rights to the intellectual property an employee develops at the company for the company.
- Non-Compete Contracts: Non-compete contracts are also an essential part of the hiring package. These contracts prohibit employees from leaving to work for a competitor within a number of years of leaving the company. These contracts allow companies to sue a former employer if they violate the stipulations of the agreement.
- Employee Handbook: The employee handbook is a useful tool for clarifying and enforcing company rules. A company handbook may explicitly describe a company’s privacy, Internet, computer use and telecommuting policies. In general, these policies inform employees that they have no expectation of privacy at work or using a work computer whether on site or at home.
Texas Non-Compete Law
Before businesses draft a non-compete contract, it is important they understand the state law that governs the scope non-compete contracts may have. In Texas, non-compete contracts are enforceable by law if they include reasonable time and geographical limits, define the scope of activity that is covered by the agreement and include restraints on employee behavior that are not greater than what is needed to protect business information.
Avoid Loss of Intellectual Capital through Employee Retention
One of the most effective ways to ensure intellectual assets are not lost, however, is to prevent employees from leaving in the first place. Employers should work to create an environment where employees feel valued and integral to the success of the company. Employees are less tempted to leave when their hard work is acknowledged and they feel their employers are invested in them. Strong leadership is also essential to retaining employees, since many workers leave due to problems with their bosses.
For business owners, preventing the loss of intellectual assets is essential to running an efficient and profitable company. If you would like help drafting documents that protect your business, contact an experienced business attorney.
Article provided by Schachter Harris, LLP
Visit us at www.schachterharris.com
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