The following are common restrictive covenants:
- Non-compete clauses or agreements: These bar current and former employees from engaging in similar types of business in a particular geographic area for a specific amount of time during employment and after leaving that business.
- Confidentiality agreements/Non-disclosure agreements: These prohibit current and former employees from disclosing information about the business during employment and after leaving the company. Among other things, they may cover trade secrets.
- Non-solicitation clauses and agreements—of clients, employees, business partners: These prohibit a former employee or principal from attempting to engage in competition with a business by soliciting and taking its clients, employees, or business partners.
- Non-disparagement clauses: These may prohibit a current or former employee from publicly writing or saying anything that is negative about a business or its practices.
- Arbitration clauses and agreements: These can require an employee or former employee to arbitrate a dispute as opposed to filing a lawsuit.
3. Independent Contractor Agreements
Employers must properly classify independent contractors. An independent contractor agreement is a fundamental risk mitigation tool to achieve that goal. It should clearly delineate the essential terms of the independent contractor relationship, such as the work to be performed, payment terms, liability, and termination. By establishing these matters in a written agreement, the chance of a dispute is reduced. The agreement also helps ensure compliance with various laws.
4. Technology Policy and Agreements
Depending on the industry, employers may consider implementing a technology policy or use agreement. This should outline employee responsibilities and rights and set forth the company’s expectations of employees regarding technology in the workplace. A technology policy or agreement is also a good way to clearly articulate any restrictions regarding technology use on company property, such as the use of company computers or mobile devices for personal use. Finally, it can also help educate employees to identify and avoid potential cyber threats, which can mitigate risk to the business. Such policies or agreements are especially important given the increase in remote work and vulnerabilities in unsecured wireless networks.
5. Social Media Policies
It is likewise important for an employer to have an effective social media policy. A social media policy can limit the risk of potential claims arising from social media posts and their impact. It can also set clear rules for what employees can and cannot say on social media about the company. Likewise, it may also set forth rules for use of personal social media during work hours.
These measures are fundamental risk mitigation tools for employers. It is also important for employers to have current policies that set forth and prohibit impermissible conduct. Finally, these policies should set procedures for clear communications between company management and employees. Together, these measures will help foster a pleasant work environment while mitigating against the risk of employment-related claims and disputes.