A Confidentiality Agreement can also include restrictive covenants, which are clauses in a contract that limit or prohibit certain behaviors that may risk the success of a business.
However, a word of caution: for your document to be enforceable, the time limits and the impact that these clauses have on the parties involved must be fair and reasonable.
Non-competition clause
Also known as an exclusivity clause, this provision aims to prevent an employee from using insider knowledge to compete for business with their employer. This term may be in effect while the employee works for the company or for a certain length of time after they leave.
Typically, a non-competition clause prohibits a person from:
- Giving advice, money, or skilled labor to a competing business or individual
- Directly competing for business as an owner, sole-proprietor, partner, or otherwise
Non-solicitation clause
This provision aims to prevent an employee from interfering in the employer’s relationship with other employees or contractors.
Any such interference could be damaging to the business. It would be an unfair advantage for the employee or former employee to use insider knowledge of the employment terms of other workers to lure them away.
A non-solicitation term may be in effect while the employee works for the company or for a certain length of time after they leave.
Typically, this clause prohibits the individual from:
- Convincing an employee or contractor to quit
- Discussing other employment opportunities with employees or contractors
- Hiring an employee or contractor to work for a competing business