JUL-AUG 2018

MedEsthetics—business education for medical practitioners—provides the latest noninvasive cosmetic procedures, treatment trends, product and equipment reviews, legal issues and medical aesthetics industry news.

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28 JULY/AUGUST 2018 | Med Esthetics employees and patients for the exiting employee's benefi t. Non-solicitation clauses are held to the same standard as those governing non-compete agreements: They must be reasonable and necessary to serve a legitimate business interest. NON-DISCLOSURE PROVISIONS Even if you cannot enforce the non-com- pete or non-solicitation agreement, you may be able to prohibit employees from using your confi dential information to gain a com- petitive advantage. This is where non-disclo- sure provisions come in. Even states that do not permit non-compete or non-solicitation agreements, such as California, will enforce a non-disclosure agreement. To be enforceable, the non-disclosure agreement must be reasonable and the infor- mation to be kept confi dential must be valuable or protect a legitimate business interest. There is typically no limit on time or geographic scope for non-disclosure agreements. When drafting a non-disclosure agreement, be specifi c as to the type of information that is considered confi den- tial. Include a requirement that the employee must deliver promptly to the employer upon termination of employ- ment or at any other time the employer may request, without retaining any copies, all confi dential business in- formation. Also include wording that the employee agrees not to transfer any employer information to any personal computer or other electronic device that is not otherwise used for any business purposes relating to the employer. KEY ELEMENTS Carefully draft the restrictive covenant agreement to improve the chances that it will be enforced in a jurisdic- tion that permits such agreements. Be sure the restrictive covenant includes these key elements: • In detail, defi ne the nature of the business and the ser- vices provided. • Include a geographic area and a time frame of restriction. • Insert a clause that the employee agrees and acknowledg- es that the non-compete provision will not unreasonably affect the employee's livelihood and that it is reasonable in both temporal and geographical scope. • Include a clause stating that a breach would result in ir- reparable harm to the business. Some businesses include a clause for liquidated damages if the agreement is breached—a specifi ed sum of money or formula for determining the damages, proportionate to the actual harm done. It is diffi cult to estimate the amount of damages caused by a breach of a restrictive covenant, so the primary remedy is a permanent injunction to restrain the breach. In other words, the former employee must stop offering their servic- es in that location, soliciting business from your patients or using your trade secrets. A court also can award monetary damages for the breach along with an injunction. Allyson Avila is a partner at the national law fi rm Gordon & Rees Scully Mansukhani. Contact her at 845.406.2935, LEGAL ISSUES Every restrictive covenant agreement should include a non-disclosure provision for the return of confi dential information. © GETTY IMAGES

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