California Confidentiality Agreement Laws

California employers will soon have to comply with a new crop of laws, stemming from the #MeToo movement, which will limit the conditions allowed by employment contracts. What types of contracts and what types of conditions can you apply for? The answer, in which three separate bills are discussed, adding three new provisions of the California code, is a delightful answer. But we`re going to keep going here. Many employers will offer incentives to current and former workers in exchange for signing an NDA. This practice is both legal and common in the business world and fully accepted by the courts. For example, a retiring staff member may be asked to sign an NOA in exchange for additional compensation. In addition, an employer may apply for an NOA when hiring a new employee. In this case, the act of obtaining employment is considered a sufficient incentive. However, if your current employer asks you to sign an NDA without compensation, the confidentiality agreement may not apply. Unlike non-competitors, which are rarely applicable, confidentiality agreements, which are properly developed, are generally applicable. It is therefore important that any staff member who receives a confidentiality agreement reads it carefully.

If the employee has any doubts or concerns, the employee should invest between $99 and $300 to verify the confidentiality agreement and explain it through a lawyer. Know your rights and contact us today! Some large companies often require their employees to sign a confidentiality agreement or ownership agreement that requires the employee to disclose all inventions that have been written, designed or reduced up to one year after the end of staff employment. Some of these agreements also provide that such inventions are supposed to be owned by the former employer and that this presumption can only be overcome if the worker can prove that the invention is eligible for protection under the California Laboratory Code 2870. To cover this burden, the worker must demonstrate that the invention (1) was fully developed at its own time, without using the employer`s equipment, supplies, facilities or business secrets; (2) do not refer, at the time of conception or reduction, to the practice of the employer or to the actual or proven research or development expected or result from the worker`s work for the employer. See California Labor Code 2870 (a). The new government code No. 12964.5, which does not expressly apply to negotiated transaction agreements, provides that, as a business lawyer for more than 10 years, I have seen my fair share of unnecessary and unenforceable confidentiality agreements and agreements. In general, this seems to happen when individuals choose a form from a book, or now from the Internet, and rely on a size for all. Well, it doesn`t do it for a wide variety of reasons. California courts can impose a confidentiality agreement on employees that protects confidential information that does not meet the criteria of a trade secret. A confidentiality agreement can protect against client listings, business strategies, expansion plans and other confidential information to the current employer, depending on the specific terms of the agreement and the nature of the information. A confidential agreement is unlikely to protect information known to everyone in the industry, information that the employee knew prior to signing the confidentiality agreement, or information the employee obtained beyond the scope of his or her employment.

NOTE: This carve-out does not apply when a government agency or public official is partisan. In these cases, the agreements cannot contain provisions that contain a confidentiality of the applicant`s identity. These questions of fact can be difficult and costly to prove, so a written agreement that provides exactly what is confidential and what does not solve this problem and, combined with a good arbitration clause, can avoid costly legal battles.