Restrictive covenants in employment agreements can be very useful to companies on the leading edge of technology and business innovation. This document is a general checklist of factors employers should consider with respect to the use of such covenants.
Washington Employee Restrictive Covenants, also known as non-compete agreements, are contractual clauses that limit the activities of employees after the termination of their employment. These covenants are designed to protect employers' legitimate business interests while addressing concerns related to competition, intellectual property, and the preservation of trade secrets. In the state of Washington, there are several types of Employee Restrictive Covenants recognized under the law: 1. Non-Competition Agreements: These agreements restrict former employees from engaging in competitive activities that directly or indirectly compete with their former employer's business. Non-compete agreements typically specify a geographical area and a specific timeframe for which the restriction applies. 2. Non-Solicitation Agreements: These agreements limit former employees' ability to solicit or engage with their former employer's clients, customers, or employees. Non-solicitation clauses typically cover a defined period after employment termination and may extend to both direct and indirect solicitation. 3. Non-Disclosure Agreements: These agreements restrict the dissemination of confidential and proprietary information to third parties. Non-disclosure agreements are crucial for protecting trade secrets and other sensitive business information from being shared or exploited by former employees. 4. Non-Disparagement Agreements: These agreements prevent former employees from making negative or derogatory statements about their former employer, its products, services, or employees. Non-disparagement clauses aim to safeguard a company's reputation and public image. 5. Intellectual Property Agreements: These agreements specify the ownership, use, and protection of intellectual property created or developed by employees during their employment. Intellectual property clauses define the rights of both the employer and the employee concerning inventions, patents, copyrights, trademarks, and trade secrets. 6. Garden Leave Agreements: While not specifically recognized under Washington law, some employers may include garden leave provisions in their restrictive covenants. These provisions require an employer to pay an employee during the period when they are restricted from engaging in competitive activities. The purpose is to prevent employees from working for competitors immediately after termination while ensuring they remain financially stable during the restricted period. It is important to note that Washington has specific statutory requirements for the enforceability of Employee Restrictive Covenants. For non-compete agreements, for example, the duration must be reasonable, the restrictions must be necessary to protect the employer's interests, and the employee must receive adequate consideration. Employers in Washington must carefully draft these covenants to ensure they are reasonable, meet the legal requirements, and are tailored to the specific circumstances of each employee and their position within the company. It is advisable for both employers and employees to seek legal advice when negotiating and enforcing these agreements to ensure compliance with Washington state law.
