While this is not typically a topic of discussion on this construction blog, two recent construction related lawsuits filed in Nebraska highlight the importance of making sure your key employees do not walk away with your projects and employees.

We all know the situation.  A long-term, faithful employee gets the itch to head out on his own or take another job for a few more dollars.  Maybe you wish the employee well or maybe you don’t, but do you have everything in place to prevent this employee from taking your client list or asking your other employees to join him at the new employer?  This is where confidentiality and non-solicitation agreements come into play.

Confidentiality Agreements

As the name indicates, confidentiality agreements require an ex-employee to keep your confidential information private and not share it with his new employer.  This may include your customers, suppliers, pricing, order tracking system, and even a list of work performed in the last few years.  This is your information and you are entitled to keep an ex-employee from using it for the benefit of his new employer.

To keep an ex-employee from using this information, you need to enter into an agreement with the employee, before he leaves, ideally before he’s even thinking about leaving.  This agreement may be a provision in your handbook or a standalone agreement that defines confidential information and provides:

In the event of the termination of my employment, whether voluntary or involuntary, I agree not to use this information or disseminate the Company’s confidential information to any other individual or entity.

Non-Solicitation Agreements

Non-Solicitation Agreements prevent ex-employees from working with those clients he worked with while employed by you.  Importantly, this only applies to those customers with whom the now ex-employee worked with.  So, you cannot prevent your ex-employee from contacting any clients, but only those with whom he worked.  A non-solicitation clause can also be used to prevent an ex-employee from enticing your employees to work for his new employer.

Again, you need to enter into this agreement before the employee leaves, and ideally when he or she starts working for you.  A non-solicitation provision can be contained in your employee handbook or a standalone agreement and generally provides:

In the event of the termination of my employment, whether voluntary or involuntary, I agree not to directly or indirectly sell, solicit, direct, manage or otherwise have any involvement whatsoever in the sale, marketing or solicitation of any Employer customers with whom I actually did business and had personal contact while employed by Employer. I further agree that I will not, either directly or indirectly, call on, solicit, or induce any other employee to terminate his or her employment.

Take Away: You have every right to protect your confidential information, clients and employees.  But, you need agreements in place well before an employee is thinking about leaving.  Ideally, these agreements are contained in your employee handbook or are stand alone agreements signed when the employee starts to work for you.