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9. Employee Agreements 


Confidentiality agreements and non-compete covenants are most often entered into between employers and employees or business partners. Enforceability of these contracts varies among the states so if you are considering utilizing either, it is recommended that you contact an attorney in your local jurisdiction.

Confidentiality Agreements

Confidentiality agreements ensure that proprietary information disclosed by one party will be kept secret by another party. Such agreements are often the only method to ensure that employees keep trade secrets, allowing both parties to acknowledge that a duty of confidentiality exists, defining the scope of the duty and spelling out the possible remedies or sanctions associated with the breach of the duty.

Non-Compete Covenants

The purpose of a non-compete covenant is to ensure that an employee will not compete against an employer or former employer. Since competitors often recruit each other's employees hoping to gain an advantage, these covenants are especially important. Without such a covenant, a top salesperson leaving to work for a competitor may be able to take a list of important clients, thus harming the business of the original employer.

Sample Agreements

Examples of confidentiality contracts can be found on the Lawsmart site. A sample non-compete covenant can be found at .

Hiring Issues

Required Employee Registration

Employers are required to complete and maintain an Employment Eligibility Verification I-9 Form when hiring an employee. I-9 Forms are most quickly obtained by downloading from the U.S. Citizenship and Immigration Service (USCIS ) Web site.

Interviewing Guidelines

When interviewing job candidates, it's important to focus exclusively on the skill and experience needed for the position. Visit for an in-depth analysis of interview do's and don'ts. For quick information, the NFIB Legal Foundation offers a succinct interviewing guidelines.

Union Requirements

Right to Work states secure the right of employees to decide for themselves whether or not to join or financially support a union, and makes it illegal for unions to require membership as a condition of employment. In non-Right to Work states, employees may be required to join unions in order to retain employment at some companies regardless of opposing political views or religious beliefs. If unions have or are forming in your business, find out what the law is in your state.

Reference Checks

When called for reference checks, employers are generally expected to reveal only the employees' date of hire, date of termination and job title, and are prohibited from giving confidential information. If the applicant signs a "waiver and hold harmless agreement" as a condition for applying for employment, the employer may feel more comfortable specifying additional information specified by the agreement.

Credit Checks

To obtain a credit report on an employee or prospective employee, the employer must provide clear and conspicuous written notice that a credit report may be requested, and obtain written consent from the applicant or employee.

Background Checks

Employers generally have the right to access arrest and conviction records that are public information, but whether employers can use such information for hiring decisions varies from state to state. Some states allow employers to discriminate based on criminal convictions but not on arrests. Other states apply varying rules depending on the position or industry being applied for.

Employing Foreign Workers

If you are contemplating hiring foreign workers, be sure to review the USCIS Employment Handbook (.pdf file). Also, take advantage of the INS Alien Employee Visa Classification eTool for help determining visa classifications.

People with Disabilities

Visit the Social Security Administration's Employers' Web page for information on hiring people with disabilities, including tax incentives, referral services, FAQ's, and helpful links to the Department of Labor's Office of Disability Employment Policy.

Employing Military Reservists and National Guardsmen

Find out what your obligations are under the Uniformed Services Employment and Reemployment Rights Act (USERRA)by using the U.S. Department of Labor's Resource Guide to USERRA.
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