As business owners and employers, we all strive to find the most talented, honest and hard working people to help us run our companies. When hiring new employees, you never really know how well they will fit in, or whether or not they will actually work out for the long term. I therefore believe it is imperative that your policies include a requirement to have all new employees sign an Employee Confidentiality and Non-Solicitation Agreement. In addition, all existing employees, regardless of whether they are temporary or permanent, should sign this agreement.
Protect Your Business
With many businesses, the employees will have direct access to the clients of the company and you hope and expect that they will develop very strong relationships with them. Relationship building is a cornerstone to creating a positive and consistent client service experience. But what would happen if one or more of your employees decided to leave your company, and move to a competitor or even start their own company? Would you be able to prevent them from contacting your clients? The answer is no, unless you’ve protected your business through the use of applicable legal agreements.
Bad Things Just Happen!
We can all wish that bad things won’t happen to good people, but unfortunately they often do! I’ve seen several situations where employees have valued themselves much higher than their employer does. They may believe that they were the main reason that the company has prospered, and that they haven’t been properly recognized. On the other hand, the employees may be outstanding, but do not feel their hard work is appreciated or that their compensation is appropriate considering their contributions.
If you don’t ensure your employees are well looked after and recognized for their accomplishments, others will. It’s a competitive world out there, and if your competitors are looking for experienced staff, they may approach yours and have more to offer them than you do.
There may come a point when the employee becomes too demanding and may threaten to leave if their demands are not met. Without an Employee Confidentiality and Non-Solicitation Agreement in hand, you could be negotiating from a point of weakness.
How Will an Agreement Help?
Simply put, by signing a Confidentiality and Non-Solicitation Agreement, your employees will have promised to keep all of your personal, business and client information confidential. Furthermore, they agree that they cannot use any of this information to their advantage, or in any manner whatsoever, in particular after they leave your employment. They also promise not to solicit any business from your clients and if they should, you would have financial and legal recourse against them.
In addition to the above, a Confidentiality Agreement will ensure that your employees understand their obligations with respect to the confidentiality and privacy of your business and all client information. Particularly when it comes to discussing their day-to-day business with family, friends, colleagues etc. All employees must understand that ALL information within your office is intended only for business purposes, and is not to be discussed with other outside parties.
You’ve probably heard the saying “good fences make for good neighbours.” Well we can also say “a good agreement makes for a good relationship”.
If you need a sample Confidentiality and Non-Solicitation Agreement, feel free to download the sample I’ve provided below. I always recommend consulting with a lawyer that specializes in business contracts.