FAQS
What agreements should a company have with its founders?
- Operations
- Human Resources
At the very least, start-up companies should enter into agreements with their employees that cover the following:
- (i) the confidentiality of employer information; and
- (ii) the assignment of inventions from the employee to the employer.
Confidentiality agreements prevent employees from using or disclosing employer confidential information except for the benefit of the employer. Invention assignment agreements require employees to assign inventions that are created by the employee during their employment to the employer. If an employee is also a director and/or officer, you should also consider entering into an indemnification agreement with that individual in order to insulate them from liability from suits against the company.
It’s also important to note that employment agreements are subject to complex federal and state laws and regulations that are constantly updated. In some instances, entering into an employment agreement that contains an illegal provision, such as a post-employment non-compete provision in California, could have the effect of rendering the entire agreement invalid if litigated.
Therefore, it’s best to consult with employment attorneys in the states in which you hire in order to obtain state-of-the-art agreements to be entered into with your employees.
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