California employment laws put a lot of emphasis on protecting the rights of individual employees. There are more laws that restrict employers and protect employees in California than at the federal level. Some of these unique rules will put employers at risk.
For example, California does not enforce non-compete agreements. Employers hoping to preserve their competitive advantage and protect their intellectual property rights may wonder what options they have in California. After all, it only takes one worker to leak a secret recipe or provide a direct competitor with a client list and potentially devastate the business.
Some companies choose to include non-compete agreements in their employment contracts anyway as a deterrent, but the California civil courts will not uphold those contracts if there is an issue later. How else could your business potentially protect its intellectual property?
You can still enforce a non-disclosure agreement
While non-compete agreements are the best-known restrictive covenants used in employment contracts, they are far from the only agreements that limit an employee’s actions outside of work and after leaving a company. There are other restrictive covenants that employers can use to protect their business.
Non-disclosure agreements prevent workers from taking sensitive information and sharing it with others. When added to an employment contract, they can both deter misconduct and give you a way to hold workers accountable later. A non-disclosure agreement can protect you by giving you the right to take action if a worker has clearly shared your trade secrets with someone else after leaving your company.
You can potentially go to court to ask for an injunction to stop them or for compensation for their use of your trade secrets for the benefit of their new employer or the business they just tried to start.
Employment contracts are key to employer protections
The obligations you have to your workers and their responsibilities to you depend not just on state law but also on the contracts that you sign with your workers.
Rather than using boilerplate documents that offer very little specific detail, your company may benefit more from drafting specialized employment contracts. The addition of restrictive covenants can be particularly important with onboarding new executives or managers.
Learning more about how to protect your company’s intellectual property in California can help your business remain competitive.