Confidentiality and Non-Disclosure Agreements in California
Posted by Jacob I. Kiani | Sep 18, 2013 | 0 Comments
Most companies may want to include within an employment contract, or in a separate agreement, an agreement protecting confidential information of the Company. Several decisions interpreting California law have recognized that a confidentiality agreement is enforceable, even if the confidential information protected thereunder is not a trade secret. See Self-Directed Placement Corp. v. Control Data Corp., 908 F.2d 462 (9th Cir. 1990) (collecting authorities). However, there is authority to the contrary. See Rokos v. Peck, 182 Cal. App. 3d 604 (1986) (doubting existence of cause of action for breach of confidence).
Definition of “Confidential Information."
“Confidential information" should be defined in the agreement. A typical definition is:
“information and material of the company which is deemed by the Company in its sole discretion to be confidential, including proprietary information and/or ‘trade secrets' as defined by the Uniform Trade Secrets Act."
A “trade secret" is defined as:
“information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." Cal. Civ. Code § 3426.1.b. The agreement should also provide a non-exclusive list of examples of confidential information.?????
Restrictions on Use of the Company's Confidential Information. Non-disclosure Agreements.
The agreement should provide that the employee will not make confidential information available to anyone outside the company (or to coworkers with no valid reason to know) during or following employment except with the written permission of the company.
The agreement should provide that the employee agrees not to use confidential information in other than the company's business either during or after the employee's employment.
The agreement should provide that the employee will not remove from company premises or reproduce confidential information except as authorized or as required in the performance of the employee's duties.
Return of Confidential Information.
The agreement should provide that the employee agrees to return all confidential information to the employer upon termination of employment or upon other request. (The agreement may also provide for return of non-confidential information developed by the employee or otherwise belonging to the company.)
Sample Confidential Information Language:
"Employee, in the performance of Employee's duties on behalf of the Company, shall have access to, receive and be entrusted with confidential information, including but in no way limited to development, marketing, organizational, financial, management, administrative, production, distribution and sales information, data, specifications and processes presently owned or at any time in the future developed, by the Company or its agents or consultants, or used presently or at any time in the future in the course of its business that is not otherwise part of the public domain (collectively, the “Confidential Material"). All such Confidential Material is considered secret and will be available to Employee in confidence. Except in the performance of duties on behalf of the Company, Employee shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material, unless such Confidential Material ceases (through no fault of Employee's) to be confidential because it has become part of the public domain. All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company's business, which Employee prepares, uses or encounters, shall be and remain the Company's sole and exclusive property and shall be included in the Confidential Material. Upon termination of this Agreement by any means, or whenever requested by the Company, Employee shall promptly deliver to the Company any and all of the Confidential Material, not previously delivered to the Company, that may be or at any previous time has been in Employee's possession or under Employee's control"
Los Angeles Employment Attorney Jacob I. Kiani | Confidentiality and Non-Disclosure Agreements
The Law Office of Jacob I. Kiani is a Labor and Employment law firm located in Los Angeles, California. Los Angeles Labor Lawyer Jacob I. Kiani assists clients throughout Los Angeles, Hollywood, West Hollywood, Downtown Los Angeles, Beverly Hills, West Los Angeles, Orange County, Century City, and the San Fernando Valley with legal matters related to Labor & Employment Law, Business Law & Litigation, Human Resources Law, Severance Negotiation Law, Wage and Hour Law, and Unbundled Legal Services including Contract Drafting Services.
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