The Employee Covenant Agreement serves as a critical tool for businesses in the United States to protect their confidential information, intellectual property, and business relationships. This agreement becomes particularly important when onboarding employees who will have access to sensitive information or key business relationships. The document typically includes provisions for confidentiality, intellectual property assignment, and where legally permissible, non-compete and non-solicitation clauses. The enforceability of these provisions varies significantly by state, requiring careful consideration of local laws during drafting. The Employee Covenant Agreement should be customized based on the employee's role, access to sensitive information, and the specific business interests requiring protection.
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1. Parties: Identification of the employer and employee entering into the agreement
2. Background: Context of the agreement and employment relationship
3. Definitions: Key terms used throughout the agreement including Confidential Information, Intellectual Property, etc.
4. Confidentiality Obligations: Employee's obligations regarding confidential information and trade secrets
5. Intellectual Property Rights: Assignment of IP created during employment and related obligations
6. Return of Company Property: Obligations regarding return of company materials and information
7. Term and Termination: Duration of obligations and conditions for termination
8. Governing Law: Jurisdiction and applicable law
1. Non-Compete Provisions: Restrictions on post-employment competition - include only when permitted by state law and necessary to protect legitimate business interests
2. Non-Solicitation Provisions: Restrictions on soliciting employees or customers - include when protecting customer relationships or workforce stability is crucial
3. Garden Leave: Paid leave during notice period with restricted activities - include for senior employees with sensitive information access
4. Dispute Resolution: Procedures for resolving disputes including arbitration - include when alternative dispute resolution is preferred over litigation
1. Schedule A - Excluded Inventions: List of pre-existing inventions owned by employee
2. Schedule B - Restricted Territory: Geographic scope of non-compete restrictions
3. Schedule C - Competitors List: Specific companies or entities considered competitors - include when non-compete is limited to specific competitors
4. Schedule D - Consideration Details: Specific consideration provided for restrictive covenants - include when additional consideration beyond employment is provided
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