[Podcast]: Key Contractual Provisions For Employers To Incorporate In Documents With Confidentiality Covenants

Author:Ms Kate Napalkova and Oleg Zakatov
Profession:Proskauer Rose LLP

In this episode of The Proskauer Brief, Kate Napalkova, special employee benefits and executive compensation counsel, and associate Oleg Zakatov discuss potential pitfalls that lurk in employment agreements and other employee compensation arrangements. Specifically, they will focus on key contractual provisions that employers should incorporate into any document that includes a confidentiality covenant. Employers should be sure to tune in to see why involving your in-house team and outside executive compensation and employment counsel to regularly audit employment agreements, employee handbooks, independent confidentiality and IP assignment agreements, and other company policies is always a good idea.

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Oleg Zakatov: Hello and welcome to the Proskauer Benefits Brief: Legal Insights in Employee Benefits and Executive Compensation. I'm Oleg Zakatov, an associate in Proskauer's New York office, and I'm joined today by Kate Napalkova, special counsel in Proskauer's Los Angeles office. We'll be doing a series of podcasts discussing potential pitfalls that lurk in employee agreements and other executive compensation arrangements. For today's episode, we'll focus on key contractual provisions that employers should be sure are incorporated into any documents that include a confidentiality covenant. Kate, to start, can you tell us a bit about what confidentially covenants are?

Kate Napalkova: The confidentiality covenants are contractual provisions. They can be found in individual employment or in independent contractor agreements, but they can also often appear in other documents. Equity plans, employee handbooks, standalone confidentiality and IP assignment agreements, company policies and partnership are similar agreements. Confidentiality provisions generally prohibit employees during the term of their employment, and often at all times after termination, from using an employer's confidential information outside of the scope of employment, subject to limited exceptions. While that seems fairly straightforward, the scope of the covenant and the exceptions to the covenant are where things can get really interesting.

Oleg Zakatov: How So?

Kate Napalkova: Well, in setting the scope of a confidentially covenant an employer will often want to define that scope as broadly as possible to get the most protection that they can with respect to all types of confidential or proprietary information. An employee, on the other hand, they'll...

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