Protecting company information via contractual terms

Employers may have confidential information that they want to protect from being disclosed to competitors, customers, or the public. This information can include trade secrets, customer lists, marketing strategies, and other proprietary information. To protect this information, employers use contractual terms in employment agreements, non-disclosure agreements, and other contracts with their employees.

KEY POINTS

• Employers may also wish to protect the ownership of inventions and limit an ex-employee's ability to work in competition with them.
• Well drafted clauses can ensure that an employer has the correct mechanism for preventing its vital operations from being compromised.
• To be enforceable, these contractual terms must meet certain requirements.
• They must be reasonable in terms of duration, geographic scope, and the type of information being protected. Employers also need to ensure that employees receive adequate consideration in exchange for agreeing to these terms, such as a job offer or a bonus.