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Onboarding executives in California while protecting trade secrets

On Behalf of | May 15, 2022 | Uncategorized

Your company needs to know both state and federal employment laws to avoid mistakes that can damage its reputation or cost money. Complying with federal regulations won’t be enough. California state laws offer more robust protections for employees than federal rules do. The state has a reputation for proactively protecting the rights of workers. 

For example, California has expanded overtime laws when compared with the federal government, which means there are more situations in which workers have a right to higher wages for their work.  California also refuses to enforce non-compete agreements against employees, a decision that can make the management team at your company feel nervous about bringing in new executives or other high-ranking employees. 

Thankfully, there is a viable workaround for those who need to protect trade secrets at their business but cannot use non-compete agreements because of California rules. 

You can use other restrictive covenants in your contracts

Although the California civil courts likely will not uphold a non-compete agreement even if you have enforced it in other states, you have other options. 

You could include a non-disclosure agreement. In a non-disclosure agreement, an employee promises not to share information obtained through their employment at your company with others, even after they leave.  You can use such agreements to specifically protect your trade secrets. A non-solicitation agreement is also a valuable tool for California employers. It can prevent a former worker from trying to poach your clients or your employees after they start a new company or find a new job. 

Adjusting and updating your employment contracts can help you comply with California employment laws while still protecting your business.