Category Archives: Employment Agreements

Five Mistakes To Avoid in Drafting Non-Compete and Non-Solicitation Agreements

Employers often seek business protection by entering into agreements with employees that restrict their business activities after leaving employment. Such agreements may prohibit former employees from using confidential information, from soliciting customers or employees, and from competing against the employer. Time is of the essence when an employer learns that a former employee is violating his or her contractual obligations. Typically, the employer will quickly send a “cease and desist” notice to the employee and to his or her new employer. In some instances, the employer will also seek an expedited order in court that prohibits the former employee from …

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Why Employers Should Care About Section 409A

Section 409A is a section of the Internal Revenue Code that provides comprehensive rules that dictate how nonqualified deferred compensation is taxed.  Very simply, “deferred compensation” is defined as a portion of an employee’s compensation that is paid out at a date after which the income is actually earned.  Some common examples of deferred compensation include pensions, retirement plans, and stock options.  The primary benefit of most deferred compensation is that the recipient is able to defer payment of applicable taxes to the date, or dates when the income is actually received. Why Should Employers Care? One major concern for …

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Are You Hiring Litigation?

Understanding and Managing a New Hire’s Contractual Obligations To a Prior Employer Prudent employers take steps to ensure that their employees do not disclose their confidential information and, in appropriate circumstances, contractually restrict them from soliciting their customers and employees after leaving employment.  But what about the contractual restrictions that new employees may have to their former employers?  The time to find out about non-compete, non-solicitation and non-disclosure agreements is during the hiring process.  Overlooking this key step in hiring due diligence can have dire consequences.  The new employer may be sued for damages by the former employer for interfering …

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