Employer/Employee Contractual Disputes

It is quite common for employers and employees to enter into written contracts that govern the employment relationship. Independent contractors are also subject to written agreements dictating the business relationship between the business and the independent contractor.

Due to the high level of competition and expertise among businesses, it was necessary for businesses to create methods by which the business could safeguard its trade secrets, prevent unfair competition and protect its clients from competitors.

The prevalent clauses in contracts arise in the form of a non-compete or non-competition clause, non-disclosure clause and non-solicitation clauses. While typical in employment matters, these clauses also arise in other types of contractual matters.

Kurtz Law is practiced in analyzing and providing counsel for the following matters:

∙           Non-competition or non-compete clauses

∙           Non-solicitation clauses

∙           Non-disclosure or confidentiality clauses

∙           Forfeiture clauses

The goal of a non-compete or non-competition clause is to prevent the employee from being employed in a similar profession upon termination of the employment. The non-compete clause assumes that once an employee leaves employment, he or she will use the skills, expertise, trade secrets and customer information in a new position, perhaps to gain advancement or higher pay.

However, in order to not to prevent people from being freely able to move about the workforce, it was necessary for the courts to balance the rights of the employer versus the rights of the employee. As a result, there are requirements for a non-competition clause to be valid.

A non-solicitation clause, in its most basic form, states that the former employee agrees not to recruit employees or solicit business from current customers of the employer. These clauses are often used together with non-compete clauses and are both subject to strict requirements to determine validity.

A non-disclosure clause is targeted at protecting confidential information that could harm one party or the other. Clauses generally cover sensitive or proprietary information and can bar absolute disclosure or bar disclosure only under certain conditions.

Confidentiality clauses also arise outside of the employment arena in business contracts and settlements. In order to maximize the effectiveness of the clause, the framework should be specific to the business relationship and must contain certain factors and limitations.

Trade secrets and intellectual property are often the target of protection for a non-disclosure clause.

A forfeiture clause is a clause that provides for the loss of rights or privileges upon violation of the conditions within the clause. Forfeiture clauses arise in the employment relationship.

When it comes to these contract provisions, there are many pitfalls that await businesses, employers and employees. Bigger is not necessarily better and unreasonable or overly broad clause likely will not be enforced by the courts.

Consult with a qualified attorney at Kurtz Law for information and legal advice on these matters.


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