Do you have a problem with an employee?
You have built a solid company and have created valuable intellectual property. You have great clients and a pipeline of sales/leads. You need employees to operate your business, but you do not want to spend time and money training your competitor, which is what may happen if you do not restrict your employees. How can you protect your company and its assets? Through the thoughtful and thorough use of employee agreements.
With years of experience in issues involving employment matters, the business lawyers at the Chicago, Illinois law firm of Griffith & Jacobson can recommend best practices and address the concerns that effect your business, draft the employment policies and forms necessary, and even provide training for your employees in order to create, foster and maintain a corporate culture of compliance and proactive actions that will help your company: (a) differentiate your business from your competitors, (b) avoid and mitigate the risk of disputes, litigation and/or regulatory enforcement, and (c) focus on your primary function -making a profit.
We invite you to contact our Illinois business lawyers at 312.236.8110 or via email to discuss how we can help you effectively use your employees to expand your profits.
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A non-compete agreement prevents a departing employee from directly competing with your business and/or working in a capacity that is similar to what she was doing for you. The agreement must be carefully worded because Illinois courts balance your company's need for protection against the employee's need and ability to obtain gainful employment. Illinois courts require narrowly-defined restrictions; overly broad non-competes will not be enforced.
Non-solicitation agreements prevent employees from reaching out to your client and customer base (a fertile source of leads for the competition). They can also be worded to prevent former employees or competitors from raiding your staff and luring them away to work for a competitor.
Confidentiality and non-disclosure agreements
Confidentiality and non-disclosure agreements ensure that any trade secrets your employee learns on the job stay with the company. They define the kinds of records and information deemed confidential and prevent the employee from disclosing them to a competitor.
Generally, intellectual property belongs to the person who created it unless you have a written work-for-hire agreement. This ensures that ownership of any documents, software, inventions, or concepts that an employee creates on the job remains with your company. In other words, the employee was hired to create the work for you, not for her own purposes.
Incentive compensation agreements
Incentive compensation agreements can be used to lock down key employees and management and to secure loyalty, continuity, and confidentiality. These agreements usually:
- Provide structure for bonuses, stock options, phantom stock, etc.
- Establish targets.
- Set vesting schedules that requiring employees to remain with the company for a certain period of time before collecting benefits.
Employment manuals and policies
Employee manuals (also known as handbooks or codes of conduct) provide a code of conduct and can be used to establish your expectations of your employees. Because trade secrets can be shared so easily by electronic means, it also provides the company with a vehicle to express its communications policies. Typical policies include: sexual harassment, codes of conduct, vacation policies, and the use of company computers and e-mail. Be careful with the wording of these policies. You do not wish to (accidentally) create a contract of employment/expectation that can destroy or modify “at-will” employment.
Many businesses need to update their employee policies and address new technologies and issues of a Web 2.0 world. Do you know if your employees have posted sensitive company data on their Facebook, LinkedIn, or Twitter accounts? Could your employees be damaging your company’s reputation? Employees have used company e-mail and profiles on social networking sites that identify them as employees of your company, which can be a problem if an employee posts personal opinions or commits a cyber crime.
Firing employees can be a minefield for employers. When you need to fire an employee, prepare in advance by following these guidelines:
- Have a place and time arranged for a private meeting.
- Have a third party there to serve as a witness and verify what was said.
- Have security available if you think it is necessary.
- Know what you will say in advance so that you can be clear and concise and avoid much of the awkwardness of the situation.
- Address what happens next and what actions you need to take post-termination.
- Be prepared to address issues such as final pay, continuation of health coverage, outplacement, and the return of company property.
- The employee should be given the chance to collect personal belongings. Have someone escort the employee to clear out personal effects and then make sure they leave the premises.
Avoiding allegations of discrimination and retaliation
Employers must be careful to have and be able show that the termination was based on legitimate business reasons and be prepared to show that they handled the process in an unbiased manner. There is an “institution memory,” meaning that the ex-employee can challenge the actions taken in their case when compared to the actions taken for other employees (and ex-employees) who are in a similar position and in similar circumstances.
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