Legal and IP:

Workforce
Considerations

Founder Institute – Confidential Information

Presented by:

Joel Fairbrother
Employment Lawyer and Partner
Bow River Law LLP
jfairbrother@bowriverlaw.com
587.391.7604

DISCLAIMER: This presentation is legal information for

discussion only, focused on legal considerations in Alberta,
Canada. This is not legal advice and I am not your lawyer.

Founder Institute – Confidential Information

 Employees = Future
Competitors
Your Biggest Risks Can
Be Your Own People

Founder Institute – Confidential Information

 Employees = Future
Competitors

Cautions Before, During and After

Employment Ends

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Before bringing employees “into the fold”, consideration should be had for
what sort of information or IP they already possess. If you want to keep it
after they leave, you will have to “buy” it. Otherwise, if they brought it with
them, they can take it when they leave. Example: Book of Business.

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Before an employee actually starts working for you, get them to sign the
following:
- Confidentiality and Proprietary Information Agreement
- Non-Solicitation / Non-Competition Agreement
- Acknowledgement of “Fiduciary Status”
- These can be contained in an employment agreement, employee manual,
or as stand-alone agreements

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Confidentiality and Proprietary Information Agreement

- Should be specific to your key IP assets
- Should also be general, to cover all non-public business information
- Should confirm that anything IP they develop during employment belongs to your
company during and after employment ends, and confirm that they assign all rights
to employer including copyright
- Should be drafted by a lawyer. Ideally, an IP specialized lawyer

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Non-Solicitation / Non-Competition Agreement

- Separate clauses for non-solicit and non-compete
- Should be drafted as narrowly as possible, only covering the specific business activity you are
in, specific territory you are in, and specific activity / clients the employee will be directly
involved with
- Should cover duration of employment plus the shortest extra you can stomach
- Should be drafted by an employment lawyer
- These are usually not enforceable, but if drafted by a lawyer they have a chance. Also, “scare”
factor…

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Confirmation of Fiduciary Status

- A “Fiduciary” is a special class of employee who owes enhanced obligations to
employers re: protection of employer interests
- Most employees are not “fiduciaries”. Typically reserved for “top management”
- Getting an employee to confirm he is a “fiduciary” in writing, increases the odds a
court will agree
- Fiduciaries cannot solicit clients for a “reasonable time”

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Release
- If you fire them and pay then more than minimum legal severance, make them
sign a release to get that $
- Release can confirm their obligations under specific agreements (i.e. Confid,
IP, Non-Solicit, etc.), and / or can impose new ones
- Release can have $ penalty in it if they breach

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Cease and Desist Letter

- Have a lawyer do this for you
- The letter tells them to stop violating whatever agreement they are violating,
and threatens legal action
- In the right case, can send to their new employer and threaten to sue them too,
for “inducing breach of contract”, etc.
- Advantages: can be effective and is much cheaper than litigation

Founder Institute – Confidential Information

 Employees = Future
Competitors
Cautions Before, During and After Employment Ends

Lawsuit / Injunction
- Can be viable, but litigation can also be more expensive than its worth in
many cases
- Can be hard to prove breach, and even harder to prove damages
- If evidence is really strong, might be able to get injunction

Founder Institute – Confidential Information

 Thank you!
Joel Fairbrother
Employment Lawyer / Partner
Bow River Law LLP
jfairbrother@bowriverlaw.com
587.391.7604

THIS PRESENTATION IS NOT LEGAL ADVICE

AND I AM NOT YOUR LAWYER

Founder Institute – Confidential Information