We are a non profit school foundation in the state of Washington. For the first time we have taken on a salaried Executive Director. Our board is divided as to whether or not we should have a non compete/non disclosure for our new employee. This employee has indicated that she would like to take on additional outside contractural work while under our employement. The Executive director is refusing to sign the non compete/non disclosure agreement. What would your recommendation be to protect us, the Foundation?
Not-for-profit corporations and private foundations have, in many ways, the same concerns as business entities, but also, not surprisingly, have the additional concern it must act with particular integrity. [Unfortunately, nobody expects business corporations to have much in the way of integrity, and, in that regard, they rarely disappoint].
Your concerns are, appropriately, heightened by the executive director's refusal to sign the non-compete agreement. I am a NY attorney and cannot advise you as to your state's laws, but in many jurisdictions a non-compete agreement that is offered to the employee AFTER the employee begins his or her employment must be accompanied by additional consideration.
Possibly a compromise position that may be acceptable to both the foundation and the executive director is that the board must approve any and all outside work done by the executive director.
Your posting inculcates both a covenant not to compete and a covenant not to disclose. Obviously, the activities of your not-for-profit entity must not be disclosed by the executive director to anyone, and that, I think, is sacrosanct.
I think your foundation would do well to consult an attorney. I would think that you already have an attorney available to you.
Good luck to you.
Michael S. Haber is a New York attorney. As such, his responses to posted inquiries, such as the one above, are limited to his understanding of law in the jurisdiction in which he practices and not to any other jurisdiction. In addition, no response to any posted inquiry should be deemed to constitute legal advice, nor to constitute the existence of an attorney/client or other contractual or fiduciary relationship, inasmuch as rendering legal advice involves the ability of the attorney to ask appropriate questions of the person seeking such advice and to thus gather appropriate information. In addition, an attorney/client relationship is formed only by specific agreement. The purpose of this answer is to provide the questioner with general information, not to outline specific legal rights and remedies.
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