There are many components to building a business. You spend significant time developing your product and the staff to support it.
Unfortunately, even the best staff will eventually leave. While some may retire or seek different career ventures, others may pursue a career with a competitor.
Here’s what you should consider to keep your trade secrets safe.
Non-compete agreements
Asking employees to sign a non-compete agreement can protect your business and add value to your company. A non-compete can limit the next endeavor your employees pursue when they leave your business.
Non-compete agreements can also add value to your company. In the future, if you consider a sale, a non-compete can prevent nervous employees from going to your competitors during the transition. Having these agreements in place can give a potential purchaser more confidence in buying your business.
Non-disclosure agreements (NDA)
When you ask employees to sign an NDA, you are telling them what information is private for the company. An NDA can keep employees from sharing information, such as:
- Client lists
- Proprietary formulas
- Sales strategies
In addition to the NDA, you should make sure your employees understand the agreement. In some cases, employees move on to their next job and divulge trade secrets because they did not know that it was confidential information.
It’s not too late for current employees
Although non-competes and non-disclosure agreements are often associated with new hires, there are times when you can ask for them from current employees. When you want current employees to sign one (or both) of these documents, you need to add an incentive (or consideration) like a raise, promotion or change in working hours.