Smart executives and professionals – especially those considering a career leap – know there is usually much more to an agreement than just compensation and benefits.
Stronger competition for top-level talent is allowing in-demand professionals, executives and employees to negotiate favorable deals to join a new company, or stay with their current shop. For the unwary, however, a bad employment agreement can put the brakes on new opportunities.
If you are considering joining a new company, or a new deal to stay in your current firm, use this moment to get the best agreement possible. In addition to negotiating fair compensation and benefits – including deferred or equity compensation, severance arrangements and change-in-control provisions – take care to avoid contract terms that could unwittingly become a significant impediment to future career goals.
In particular, the following four areas are rife for postemployment disputes that can present daunting obstacles to professional development if unchecked or ignored:
•
Noncompete. A noncompete is a form of restrictive covenant placing limits on your ability to compete with a former employer. While the law generally disfavors noncompetes as hardships constraining free trade, courts in many states are likely to enforce them if reasonable in scope and duration; narrowly tailored to protect the employer’s legitimate business interest; and not harmful to the public. If the noncompete is unreasonable in scope and duration, or not designed to protect your employer’s legitimate business interest, you may be able to fight it in court.
• Nonsolicitation. A nonsolicitation is another form of restrictive covenant that limits your ability to contact a former employer’s employees, customers or clients for a period of time after leaving the company. While nonsolicitations also must be appropriately tailored and reasonable in scope and duration to be enforceable, courts are generally more willing to enforce them, as compared to noncompetes.
•
Trade secrets. Your employment agreement may contain a provision barring use or disclosure of trade secrets and any other confidential information. Depending on your business, trade secrets may include customer lists, financial data, technological processes, supplier information, strategic plans and product specifications, among other things. State and federal law offers, and courts frequently approve, strong remedies to halt and reverse the improper acquisition and use of trade secrets. While an employee may have various defenses available – such as lack of proper notice under the Defend Trade Secrets Act – to avoid costly litigation, sharp penalties and potential job loss, employees should not take anything from the company when leaving, including documents, files, devices and lists, unless expressly authorized.
•
Intellectual property. When you signed your employment agreement, you may have assigned your future rights, including patent rights, to any invention or other intellectual property created during the course of your employment. The precise language of the provision may be critical, especially for scientists, researchers or engineers who may be inventing in their basements or garages while still employed.
Well-crafted, smartly negotiated employment agreements are often critical to the long-term success of a business, as well as its executives, professionals and employees. When considering a new job opportunity, review your contract, and if you are uncertain, consult with counsel. As always, the old adage is still true: Look before you leap.
Rep. Christopher R. Blazejewski, D-Providence, is a partner in the litigation and employment departments at Sherin and Lodgen LLP, with offices in Providence and Boston.