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Honoring confidentiality agreements and waiving employment rights

  • More and more, prospective job candidates are being required to sign "non-disclosure agreements" as a part of their employment contract. These agreements commit engineers and professionals, not only to non-disclosure of company secrets, but to not seeking employment with competitors for three to five years after leaving the company.
  • Non-disclosure agreements are designed to balance an employer's concern for protecting confidential information with an employee's right to job mobility based on freedom of association. But a new and vital concern to engineers and professionals on the point of employment is just what they are commiting themselves to when they agree to such contractual provisions.
  • The prospective employee's responsibility to honor confidentiality agreements is grounded in the employer's obligation to full disclosure of the terms of employment. Balancing these is difficult in the interviewing and hiring processes as the following cases demonstrate.
  • New employees are also being asked to sign agreements waiving their right to sue the company should they be fired. In lieu of the right to sue for wrongful dismissal, companies ask that employees agree to binding arbitration carried out by an outside arbitrator. Binding arbitration is...binding, that is, it obligates both of the disputing parties to a decision decided upon by an outsider. And the company reserves the right to name the arbitrator. Companies have done this to protect themselves against the erosion of the doctrine of "employment at will" toward the notion of "just cause." But the scenarios below invites you to think about how much job candidates are being asked to give up when they waive their right to sue for wrongful dismissal.

4. we protect our property

Pedro has a job offer from Z-Corp, a manufacturer of computer chips. Z-Corp has recently had problems with its competitors who have tried to hire away its employees to get information about their chip production process. In response, Z-Corp now includes a clause (non-disclosure agreement) in its employment contract that prohibits employees from working with competitors for up to five years. Should Pedro be concerned about this? What should he do?

    What should pedro do?

  • He should refuse to sign such an agreement even if it costs him the job.
  • He should sign the agreement without complaint. It's a nasty world out there, and he is lucky to have this job.
  • Pedro should ask the company to be more explicit about the confidentiality concerns they are trying to protect. He should also ask whether it is necessary to restrict his future employment options to such an extent.
  • Your solution....

5. you can't sue us

Marta, a student at an Hispanic university has just accepted a job with a major U.S. corporation. The job seems ideal. However, she notices that her employment contract includes a clause to the effect that she cannot sue the corporation for wrongful dismissal should she be fired or laid off. Instead, the dispute would be resolved by an outside arbitrator. The arbitrator’s decision would be binding on both parties. Moreover, the arbitrator would be chosen by the company. Marta suspects that this agreement represents a “hard line” stance that the company has taken on wrongful dismissal suits. What should she do?

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Source:  OpenStax, Civis project - uprm. OpenStax CNX. Nov 20, 2013 Download for free at http://cnx.org/content/col11359/1.4
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