This is a great time of year to revisit your employee agreements and update them if necessary. Changes to employee agreements generally must be supported by consideration. End-of-year bonuses, salary adjustments, and/or promotions can provide consideration for an employer to amend the agreement with existing employees.

In reviewing your employee agreement, considering the following.

Confidentiality

  • No disclosure or use of items marked confidential information.
  • Return of company property and confidential information upon leaving company or upon request.
  • Authorize contact with subsequent employers.
  • Access to company computers, systems and data.

Inventions

  • Prompt and full disclosure of (a) inventions and discoveries, and (b) copyrightable works.
  • Proper record keeping.
  • Treatment of prior inventions.
  • Agreement to assign coupled with current assignment.
  • Authorization of company to file patent applications and execute documents if employee is unable or unwilling to do so.
  • Agreement to cooperate/assist.
  • No challenge to company IP.

Employee conduct

  • Non-solicitation.
  • Non-compete.
  • Non-disparagement.
  • Representations and warranties: (a) freedom to enter agreement and fully perform; (b) no undisclosed conflicting obligations; (c) no breach of prior obligations; (d) no knowing use of third-party IP.

Standard provisions

  • Not an employment agreement/employee at will.
  • Severability.
  • Non-waiver.
  • Breach by employer not a defense to or prerequisite to performance.
  • Choice of laws.
  • Choice of forum.
  • Integration.
  • Modification.
  • Acknowledge read and understood agreement.
  • Further acts and assurances.
  • Successors and assigns.
  • Remedies.
  • Consent to injunctive relief.
  • Adequate consideration.
  • Voluntary execution.
  • Opportunity to consult counsel.
  • Counterparts.

Don’t forget to consider state-specific intellectual property issues that may govern your agreement. For example, several states have statutes that specifically address invention ownership between an employer and an employee. Those statutes may require you as an employer to provide specific notices to your employee. 

Depending on the residence of an employee, a non-compete provision may or may not be unenforceable. In California, non-compete provisions are void; while in Texas, a non-compete provision is enforceable if the restrictions it places on the employee are reasonable in scope and ancillary to an otherwise enforceable agreement.

A regular review of your employee contracts can prevent future headaches. 

First Published In Dallas Business Journal.