MGT 554. Contracts and Procurement
Non-disclosure and Non-competition Agreements Introduction
With today’s increased emphasis on outsourcing professional services and entering into partnering agreements with other organizations, companies find themselves in situations where they may be providing outsiders with proprietary information that they do not want leaked out, or that they are offering their partners new skills that may turn them into a potential competitor. Consequently, it has become common practice to have new hires, contractors, and partners sign non-disclosure and non-competition agreements.
Generally, these agreements do not need to be very long. While it may be tempting for a company to create highly restrictive agreements, this might become troublesome if a legal dispute arises, because courts and juries are reluctant to support agreements that are so restrictive that they deny people the right to make a living. On the other hand, if they are too vague and open-ended, they won’t offer the company the protection it seeks. Creating a good agreement entails engaging in a balancing act: the agreement should be sufficiently detailed and restrictive to discourage employees, contractors, and partners from disclosing proprietary information or competing against the company, but loose enough not to be viewed as punitive by the courts.
You are about the hire an editor to help with the production of a script for a documentary on the lives of illegal immigrants in Texas (see Assignment 5, Writing a Personal Services Contract). Because the contracted editor will have access to proprietary information, you want him/her to sign a non-disclosure agreement. Also, you do not want the editor to take the skills he/she developed on the contract and begin competing against your company, so you want him/her to sign a non-competition agreement.
Create short non-disclosure and non-competition agreements that the contractor can be asked to sign.