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Protect Intellectual Property When Employees Leave

Guest post by: Allison Grace

Article Overview: When employees leave a company, managers and HR professionals should follow a process to ensure the protection of the company's intellectual property.

Protect Intellectual Property When Employees Leave

When employees leave a company, managers and HR professionals should follow a process to ensure the protection of the company's intellectual property. Any confidentiality agreements that were signed at the time of hire should be presented to departing employees, and they should be reminded verbally of their obligations to maintain theconfidentiality of records, electronic files, and information learned while working at the company. Each departing employee should sign a document representing that he/she has returned all documents, computers and electronic storage devices, and that he/she has not made copies of such records.

Departing employees who are given severance should sign a mutual release, and the release should reference all confidentiality, post-termination restrictive covenants, intellectual property assignment and nonsolicitation agreements, and make it clear that these obligations carry forward after the severance agreement is signed. If the departing employee did not sign a confidentiality agreement when hired, these protections should be included in the severance agreement.

Lastly, each departing employee should be sent a letter with a copy of his or her signed confidentiality agreements. In that letter, the company should state that theformer employee's confidentiality obligations apply to all records and files and also include the former employee's memory of confidential information and trade secrets.

Instant HR Solutions has worked with a number of clients to develop and implement confidentiality agreements and termination documentation to ensure the protection of intellectual property. Contact us today for assistance.

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Re: Template of Service Agreement/Contractor Agreement - Shimmy- I, too, would be happy to share my template contract for a service provider. But beware, a template agreement may not be sufficient to properly address your needs. Some key differences between Employees and Service Providers: 1. Tax Status. Employers are responsible for withholding tax on employee's earnings. Independent Contractors are responsible for reporting their income/taxes. There is a significant reporting burden and liability associated with this. 2. Confidentiality/Intellectual Property. Often times, employee handbooks will specify an employees confidentiality obligations and many states impute a duty of loyalty. Contractors are under no such obligations absent a written agreement. Same thing for IP/Creative works. The copyright Act draws a sharp and significant distinction between employees and contractors when it comes to ownership of creative works. 3. Liability for tortious acts. Generally an employer is liable for the tortious acts of its employees under the theory of respondeat superior. An entity hiring a contractor may/may not be liable, but without a written agreement for the contractor to indemnify/defend the hiring entity, their may be little recourse against the contractor. There are many other subtle differences too numerous to mention. I hope you find this helpful.
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