It has become more common for employers to require new employees to sign employment agreements when they are hired. The following are some typical objectives in drafting an employment agreement:
- Defining the employee’s position, compensation, duties, and performance expectations;
- Defining the circumstances in which employment will be terminated;
- Securing the employee’s services for a specific period, if desired, so that business goals may be attained;
- Protecting the employer’s intellectual property from unfair competition;
- Avoiding litigation; and
- Defining a forum and mechanism for resolving employment disputes (e.g., through the use of agreements to mediate or arbitrate disputes).
Rather than attempting to meet all of these objectives in a single document, employers occasionally enter into special-purpose agreements with an employee, such as agreements to preserve the confidentiality of information or to protect the employer’s intellectual property.
Confidentiality agreements are used to prevent a job applicant or an employee from sharing information about the company that he or she learns during a job interview or during the course of employment. The confidentiality agreement (often called a nondisclosure agreement) should specify the information that the applicant or employee may not disseminate or share. The agreement should also clearly state the period of time the agreement is valid and the period of confidentiality.
Work product agreements protect a company’s intellectual property by stating that anything the employee creates during his or her employment remains the property of the company, rather than of the individual employee. The contract should clearly define the type of product to be protected by the agreement. A typical work product agreement states that work product includes “any and all discoveries, inventions, ideas, concepts, research, trademarks, service marks, slogans, logos and information, processes, products, techniques, methods and improvements” that the employee develops independently or in cooperation with other employees or companies.