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Employment Agreement Clauses

April 1, 2024

What would happen if Coca-Cola’s “secret formula” were made public?

 All businesses have a certain amount of sensitive information that should remain private. In the course of their work, employees often learn or have access to sensitive information about their employers’ businesses. This can include trade secrets, financial data, business plans, customer lists, and other confidential or proprietary information. Employees may also cultivate valuable relationships with co-workers and customers. These relationships can be critical to the success of their employers’ businesses.

If employees use that sensitive information or their close relationships with co-workers and customers in a manner detrimental to their employers, it can have disastrous and sometimes irreparable consequences. In some cases, if a key employee or several key employees leave and start their own firm or join a competitor, a business may be hard pressed to survive, or maintain its share of the market.

Employers have a legitimate interest in protecting sensitive information and guarding against the loss of customers and other employees. One way employers can protect themselves is by having employees sign employment contracts which contain confidentiality clauses and restrictive covenants. Alternatively, if an employee owes a fiduciary duty to his or her former employer, the employee’s conduct may also be restricted.

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