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An agreement I signed upon starting employment. Not sure if…

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An agreement I signed upon...
An agreement I signed upon starting employment. Not sure if this maters but the company was acquired by another. Would like confirmation it still is valid? Then also would like to know if this clause would allow me to leave and start another company with any current coworkers (Section 2). Company would also not be a direct competitor. What are my risks?Actual name replaced with COMPANY. Only first part of contract.Whereas, Employee acknowledges and agrees that Employee will have, or has had and
will continue to have access to confidential, proprietary and trade secret information in
the course of his or her employment and continued employment with COMPANY, the
unauthorized use or disclosure of which would cause irreparable harm to COMPANY;
Whereas, COMPANY has expended and will continue to expend substantial time, money
and effort in developing customers and potential customers, in developing its customer
relationships, goodwill, its organizational and financial structure, characteristics,
products, services, design, culture, strategies, contracts, and methods of operation, and
other confidential, proprietary and trade secret information;
Whereas, Employee had a specified business relationship prior to joining COMPANY which
he or she wishes to protect and COMPANY acknowledges and agrees as set forth herein to
allow Employee to continue the business relationship in the event of his or her separation
from COMPANY;
Whereas, COMPANY and Employee wish to set forth the terms of their agreement in
writing;
Now, Therefore, in consideration of the foregoing and the mutual covenants contained
herein, as a condition of his or her employment and continued employment, and for other
good and valuable consideration, the receipt and sufficiency of which is specifically
acknowledged by the parties, COMPANY and Employee agree as follows:
1. Confidential Information. During his or her employment and at all times
thereafter, Employee will not directly or indirectly use or disclose any trade
secret, proprietary or confidential information of COMPANY or any parent,
subsidiary or related entity for the benefit of any person or entity other than
COMPANY without prior written approval of COMPANY’s CEO. For purposes of this
Agreement, in addition to all materials and information protected by the
applicable statute or law, the parties acknowledge that confidential information
will include any information, whether in print, on computer disc, tape, portable
storage devices or otherwise, which is not public information and which relates to
COMPANY or any parent, subsidiary or related entity, or to COMPANY’s or any parent,
subsidiary or related entity’s existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, processes, information relating to proprietary rights and data, knowhow,
trade secrets, design, design concepts, sales, information relating to business
or financial strategies and goals, marketing information, plans or proposals,
business or financial information, information regarding employees and employee
compensation and benefits, information relating to consultants, vendors,
subcontractors, suppliers, markets, fees, pricing or purchasing information, data
processing, information regarding the identity of customers and potential
customers, information regarding active and inactive accounts, and information
regarding strategic initiatives or direction, programs, techniques, and methods of
operation and procedures.
2. Nonsolicitation Obligations. As a condition to and in consideration of his or her
employment and continued employment, and the mutual covenants herein,
Employee agrees that, during his or her employment and for a period of twelve
(12) months following his or her voluntary or involuntary resignation or
termination for any reason, Employee will not, on his or her own behalf or on
behalf of any other person or entity:
a. Contact or solicit business from or attempt to do business with any
customers of COMPANY with whom/which Employee or any of his or her
supervisees had contact, either directly or indirectly, within the twelve
(12) months immediately preceding his or her resignation or termination;
b. Contact or solicit business from or attempt to do business with any
potential customers of COMPANY whom/which Employee or any of his or
her supervisees solicited or presented a proposal for business within the
twelve (12) months immediately preceding his or her resignation or
termination;
c. Hire or attempt to hire, or influence or solicit, or attempt to influence or
solicit, either directly or indirectly, any employee of COMPANY to leave or
terminate his or her employment with the Company, or to limit or
terminate his or her relationship with the Company, or to work for any
other person or entity.
Submitted: 2 months ago.Category: Employment Law
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Answered in 25 minutes by:
3/21/2018
Employment Lawyer: Attorney Wendy, Lawyer replied 2 months ago
Attorney Wendy
Category: Employment Law
Satisfied Customers: 939
Experience: Member at Keefer & Keefer LLC
Verified

Hello. My name is ***** ***** I am an attorney. I am working on a response to your question and should have it to you shortly.

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Employment Lawyer: Attorney Wendy, Lawyer replied 2 months ago

So the answer to the first question is a little tricky. If the second company purchased the first, they should be bound by any and all agreements and contracts the first company entered into. So chances are that the the agreement is still valid. That said, it appears that any existing business or business relationships you had when you joined the company you could continue after leaving the company. The harder issue is taking employees of this company for your new company. Though you would not be a direct competitor - so it doesn't trigger any confidentiality or non-compete concerns - the non-solicitation provision would potentially prohibit your hiring any employees of the company for 12 months after you left. The reason is that this provision is protecting something different than the confidentiality provision and that is someone leaving and taking skills na talent away from your current employer. I would be hesitant to hire their employees as it does potentially legally injure them by taking their manpower, regardless if you are directly competing or not. If you are not competing with them and your new business would not use any confidential information you learned while employed by the company, that should be fine.

I hope this is helpful. If you need further assistance, please reply to this email. If I answered your question and provided excellent service, I would greatly appreciate your 5 star rating at this time.

Please note: This information is for educational purposes only and is not legal advice. No course of action is being proposed and no attorney-client relationship or privilege has been formed as a result of this conversation.

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Customer reply replied 2 months ago
I guess one part I may not have emphasised but wondered if the relationship with a new company everyone was owners. If myself and another current employee started this new company as owners does that change what is protected under contract?
Employment Lawyer: Attorney Wendy, Lawyer replied 2 months ago

It doesn't technically change it, but I have found if you are not going to compete with your current company you have two options: (1) just do it and hope they don't challenge it, which of course comes with some risk; or (2) let them know you are starting a company with another employee that will not compete and see if you can get their blessing. And, you are correct that as owners they would not be employees, but the non-solicitation is both to prohibit hiring and to prohibit trying to get them to leave the company at all. I am happy to answer any follow-up questions.

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Category: Employment Law
Satisfied Customers: 939
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