|May 30, 2013|
Previously published on May 28, 2013
In order to protect their valuable business assets, many employers require key employees to sign employment-related agreements such as non-compete, non-disclosure, and non-solicitation agreements. When properly drafted, these agreements can be extremely helpful in protecting an employer’s legitimate business interests such as confidential and propriety information and an employer’s goodwill with its customers. However, despite the expenditure of significant time and money to craft these agreements, for one reason or another, the agreements do not always end up getting signed. Maybe the agreement gets missed in the stack of documents reviewed during the orientation process. Or maybe the high-level employee intentionally decides not to sign the agreement to keep his or her options open. Without a signed non-compete agreement, stopping that key employee from working for a direct competitor gets that much harder.
Employers may not realize until it is too late that the key employment-related documents were not signed. Do not wait until a key employee has resigned and gone to work for a direct competitor, calling on valuable customers, to ensure that you have signed employment-related documents. To help prevent this from happening, employers should conduct periodic audits of their employment-related agreements for their key employees. A simple review of whether or not the key employment-related-agreements have been signed by all of the necessary parties can place the employer in a better position when the time comes to enforce them.
Employers may also want to develop a checklist for the orientation process (or any other time that employees are regularly required to sign employment-related agreements such as promotions to higher-level positions) that requires the person filling out the checklist (or even the applicable employee) to initial the list only after key documents have been properly signed. Employers may want to separate this checklist from the general checklist that provides which information and documents have been provided to the new employee. Ensuring key employment-related documents are signed at the beginning of the employment relationship can avoid unnecessary headaches when the relationship ends, particularly where an employer goes to the trouble of having such documents in the first place.