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What work can employees take with them?

On Behalf of | Dec 21, 2020 | Employment Law |

Intellectual property is one of the most important assets your company has. While you can assign value to your products and equipment, once your intellectual property gets out, it can be challenging to get it back.

For better or worse, when your employees leave, they take the knowledge of your business with them. Depending on the type of work your employees do, some of their work content may belong to the employee.

Here’s what you should know to protect your company’s intellectual property.

Employment Agreement’s with Non-Disclosure and/or Confidentiality Agreements

A common way to protect your intellectual property, is to ensure that employees enter into employment agreements containing confidentiality and non-disclosures obligations. Confidentiality and non-disclosures agreements can give the employee clear instructions regarding the information they may encounter while working and the limitations on what they can do with that information both during their employment and after their employment with company ends. It is important to note that if employees do not enter into an employment agreement at the commencement of their employment, you will need to provide additional consideration to make the agreement binding.

Additional information regarding confidentiality and non-disclosure agreements can be found here.

It is also a good idea to ensure that your policies and procedures which apply to all employees outline your company’s expectations regarding confidentiality. A common way to do this is through an employee handbook which is provided to all employees on their first day of employment. You should also make sure that employees sign an acknowledgment that they received a copy of the company’s policies and procedures.

Assignment Clause

Another option to protect Company intellectual property is to require that your employees enter into an assignment agreement.  Assignment agreements require employees to assign the rights to any intellectual property they create during their employment to the Company. Commonly these agreements are included as a clause in an employment agreement. As discussed above, if an employment agreement isn’t entered into at the commencement of employment, you will need to ensure that the employee receives additional consideration at the time of signing in order for the agreement to be valid.

Work-for-hire

You can also keep the work your employees produce by designating what they do to be work-for-hire. Work-for-hire is commonly used when employees create something for a client, such as creative content.

When you classify something as work-for-hire, typically, the work belongs to the client, and the employee no longer has rights to what they produced.

No matter what method you choose to protect your business’s intellectual property, it is essential to talk to your employees about their obligations to keep company information confidential. If your employees do not know they have an obligation not to share certain information, they may have a difficult time helping you maintain company secrets.

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