Non Disclosure Agreements

Business By loriemoms Updated 27 Sep 2011 , 7:53pm by BizCoCos

loriemoms Posted 25 Sep 2011 , 9:35pm
post #1 of 16

All my employees are required to sign a non compete and a non disclosure agreement upon employment. They also have to sign a termination contract upon exiting that also reminds them of both and includes wording on the non disclosure again. Its states they can't use any techniques, recipes, financial information, customer information, you know the usual.
About five years ago I invented a little tool to help make buttercream easier to use. It was a modified item from the hardware store..but not just any hardware store, but one in particular that is the only chain that sells this item. Lowes hardware, Home Depot, etc, do not carry it. Its also almost impossible to find on the internet. So it is NOT a common item at all. The bakery this ex employee went to was either stupid enough, or just didn't care, posted on their blog my ex employee using this tool. I have a very nice photo of her doing it from this blog. I asked a friend of this ex employee about the tool and she said yes, she did tell her new boss about it because she was used to using it and that they weren't using it before she was employed there. I had a lot of these smoothers laying around and I suspected she stold one, as again it is NOT a common hardware tool! My question now what do to...Do I contact an attorney? I doubt this bakery will stop using the tool,. I can easily proove it was my own invention, and I am sure I can proove she didnt use it before hiring this employee. Do I go after the mployee or the new bakery?m justOr should I just let it drop and just be proud of the cakes she is now producing that finally smooth when they weren't before?

15 replies
victoria7310 Posted 25 Sep 2011 , 9:43pm
post #2 of 16

Unless you filed a patent, I don't believed you have any claim against them.

bobwonderbuns Posted 25 Sep 2011 , 9:49pm
post #3 of 16

If you went through the trouble of having her sign all that, you can contact an attorney who may be able to send a S & D letter with a few threats. Or better yet, send it to her new boss! icon_twisted.gif But you're asking legal advice in a non-legal environment, I would check with the attorney instead and ask his opinion. Then come back and tell us what happened! icon_biggrin.gif

loriemoms Posted 25 Sep 2011 , 10:16pm
post #4 of 16
Quote:
Originally Posted by victoria7310

Unless you filed a patent, I don't believed you have any claim against them.




I was wondering the same thing...

cakestyles Posted 25 Sep 2011 , 10:21pm
post #5 of 16

I too wonder about the patent thing.

Here's my opinion.....I think if it were something you handmade and you couldn't purchase it anywhere in the world (I know that's a stretch lol) then maybe you'd have a case.


I guess the big question is...by her using this particular tool, is she harming your business?

I would be more concerned if she were sharing my recipes.


But, as bobwonderbuns pointed out...I'm not an attorney so my point is probably invalid. lol

Pebbles1727 Posted 25 Sep 2011 , 10:36pm
post #6 of 16

ok, so what are the details of her contract (non-disclosure/non-compete)? She apparently violated both as I assume she got hired by competing bakery within a time frame which was prohibited and she is using your technique/tool... What are the consequences as per the contract she signed? Your grievance is with your ex employee, and I assume new employer hired her without the knowledge of her contractual obligations. Notifying the new employer of the breach by their employee may be warranted but may also get her fired. Is it what you want? I highly doubt that there is any recourse for your technique/tool getting out... you really cannot put that rabbit back into the hat icon_sad.gif

BizCoCos Posted 25 Sep 2011 , 10:56pm
post #7 of 16

Even if you don't have a patent, she violated her non-disclosure agreement. She can be sued and I believe her employer could fall into the lawsuit but I believe only if they were aware oft he fact that it was your tool/invention. My advice is to 1, obtain a patent-it may be a simpl tool but obviously worthy of patenting, and 2. seek counsel from a lawyer so that you can issue thebakery and felloe employee with a cease and desist letter.
I take non compete/ non disclosures very seriously. why bother making them a part of your employee contract if there will be no follow through upon violation? I would contact the employee and bakery owner before it became a legal issue. Yet, I would start the patent process beforehand. good luck

jason_kraft Posted 25 Sep 2011 , 11:52pm
post #8 of 16

Did the NDA specifically mention your tool? If not you probably won't be able to enforce it, since I doubt a slight modification of an existing product would qualify as a trade secret.

An attorney would be able to give you a more complete answer, but you have to ask yourself what type of recourse you are looking for (does your NDA have a clause stating that the loser pays attorney's fees?) versus how much time and money you want to invest in this, as well as what this will do to your reputation as an employer if word gets around that you are quick to sue ex-employees.

Here's a relevant article about generic NDAs:
http://www.yourlegalcorner.com/articles.asp?cat=trademark&id=106

jason_kraft Posted 26 Sep 2011 , 12:06am
post #9 of 16
Quote:
Originally Posted by margiep

why bother making them a part of your employee contract if there will be no follow through upon violation?



This is a very important point...any time you include a clause in a contract (with an employee, customer, supplier, etc.) you should think about what you would do if that clause was violated. If the answer is "nothing", that clause should be removed from the contract (unless you are bluffing).

scp1127 Posted 26 Sep 2011 , 5:46am
post #10 of 16

Did you have this contract drawn up by an employment attorney in your area? If you did not, all or part may be illegal. There are specific laws that guide these documents and they are not usually meant for small businesses with unskilled labor. that Most attorneys who are not employment attorneys do not know the specific law for their state. It is a touchy situation.

I am bringing this up for a serious point. If you pursue this, even through an attorney and your documents are illegal, you will be facing a very expensive lawsuit if the employee chooses to take action. Iam a recipient of one such lawsuit where the document was found to be illegal. All was fine until the former employer tried to enforce it. My settlement was over $100,000 for interfering with my right to work. Yours is not to this degree, but when you involve the employee and the new employer, it will get expensive if any of those documents are illegal.

If you have recipes that need to be guarded, it is up to you to secure the recipes by dividing the labor. Recipes for baking are flour, sugar, eggs, and a fat. One miniscule change and it is no longer your recipe. Courts take a dim view of employers who harass unskilled and low end laborers, such as you would find in a bakery.

loriemoms Posted 27 Sep 2011 , 12:12pm
post #11 of 16
Quote:
Originally Posted by Pebbles1727

ok, so what are the details of her contract (non-disclosure/non-compete)? She apparently violated both as I assume she got hired by competing bakery within a time frame which was prohibited and she is using your technique/tool... What are the consequences as per the contract she signed? Your grievance is with your ex employee, and I assume new employer hired her without the knowledge of her contractual obligations. Notifying the new employer of the breach by their employee may be warranted but may also get her fired. Is it what you want? I highly doubt that there is any recourse for your technique/tool getting out... you really cannot put that rabbit back into the hat icon_sad.gif




The non disclosure is signed at time of employment and another termination agreement is signed upon leaving, that includes some of the wording of the non disclosure.

She also violated use of photographs and placed them in her portfolio. I have asked her to remove them but how do you inforce this?

I

loriemoms Posted 27 Sep 2011 , 12:16pm
post #12 of 16
Quote:
Originally Posted by scp1127

Did you have this contract drawn up by an employment attorney in your area? If you did not, all or part may be illegal. There are specific laws that guide these documents and they are not usually meant for small businesses with unskilled labor. that Most attorneys who are not employment attorneys do not know the specific law for their state. It is a touchy situation.

If you have recipes that need to be guarded, it is up to you to secure the recipes by dividing the labor. Recipes for baking are flour, sugar, eggs, and a fat. One miniscule change and it is no longer your recipe. Courts take a dim view of employers who harass unskilled and low end laborers, such as you would find in a bakery.




I live in a state that has very odd labor laws...its a right to work state. Notices are not required to fire, resign, etc. Calling someone exempt in many states have to follow certain rules and they don't in this state. Our agreement was drawn up and has been relooked at by a legal professional. She wanted me to make it even stronger, but I kept it pretty standard.
(I removed my name as you never know who is reading these posts) Luckilly this employee was just a decorator and didnt know my recipes.

EMPLOYEE NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged by (bakery), the undersigned employee hereby agrees and acknowledges:

That during the course of my employ there may be disclosed to me certain (bakery) trade secrets consisting but not limited to: information including recipes, methods, processes, formulae, techniques, inventions, consultations, future planning, and business information including customer lists, pricing data, sources of supply, financial data and marketing, production, or merchandising systems or plans. I also agree all products produced or created, such as cakes, gum paste, dummy cakes, photographs, or other objects under the employment of (bakery) and use of their materials are the property of (bakery). _______

I agree that I shall not during, or at any time after the termination of my employment with (bakery), disclose or divulge to others including future employers, any trade secrets, methods, internal information, company plans, confidential information, or any other proprietary data of (bakery) in violation of this agreement.______

That upon the termination of my employment from (bakery): I shall return to (bakery) all documents and property (bakery), including but not necessarily limited to: drawings, manuals, correspondence, customer lists, and all other materials and all copies thereof relating in any way to (bakery) business, or in any way obtained by me during the course of employ.

I further agree that I shall not retain copies, notes or abstracts of the foregoing.
(bakery) may notify any future or prospective employer or third party of the existence of this agreement, and shall be entitled to full injunctive relief, and any other legal remedies available for any breach.

This agreement shall be binding upon me and my personal representatives and successors in interest, and shall inure to the benefit of (bakery) its successors and assigns.

Signed this _____ day of ____________________, 20____.

______________________________ _______________________________
Company Employee

loriemoms Posted 27 Sep 2011 , 12:24pm
post #13 of 16
Quote:
Originally Posted by jason_kraft

Did the NDA specifically mention your tool? If not you probably won't be able to enforce it, since I doubt a slight modification of an existing product would qualify as a trade secret.

An attorney would be able to give you a more complete answer, but you have to ask yourself what type of recourse you are looking for (does your NDA have a clause stating that the loser pays attorney's fees?) versus how much time and money you want to invest in this, as well as what this will do to your reputation as an employer if word gets around that you are quick to sue ex-employees.

Here's a relevant article about generic NDAs:
http://www.yourlegalcorner.com/articles.asp?cat=trademark&id=106




I have decided not to persure this case, as using it as a lessons learned, but that is a good point with the time frame, and I will ask my legal advisor on this. The non compete agreement does have time requirements in it, and perhaps she was using that to cover our ass, since they are signed at the same time, and the termination agreement contract has the same wording with time frames. I am glad this has sttarted a discussion on here, because I khaven't seen any real discussion on what to do if someone takes yoru recipes, although I think it worse, someone publishes photos they took (many times with cell phones) and claim it as theres. I can understand a decorating thinknking the made tehe cake, but often we have a girl who ices tehe cake adn someone else decorates it. many times I personally make sure the buttercream is smooth, and isn't that part o the decorating? I dont beleive in people taking created for a cake unless they did it start to finish. as well as it is presented to a customer as being purchased from teh bakery, not from that person...does that make sense? (sorry whenever I get past 200 characters, the editor here doesnt work right and jumps all over teh place...anyne else have that problem?

scp1127 Posted 27 Sep 2011 , 12:48pm
post #14 of 16

loeiesmom, my case was big, as it opened up a possibility for a class action suit. My current company's legal team did not have experience in employment law, and after several months, they had to bring in employment attorneys. This case started when an employment attorney heard of my dilemma and contacted me. I didn't know it was illegal.

I'm not picking. This is for those employers who have employees sign them. Unless it was an employment attorney that drew it up, be careful, as this is a specialty and an attorney in another field may not know the law. In many jurisdictions, a non-compete agreement must contain compensation. In order for a legal non-compete to be valid, consideration must be paid. In other words, the employee must be compensated in order for validation. A quid pro quo situation. For example, employee A agrees not to work at another bakery for X time within y miles. In consideration, employer B will pay employee A $10,000. No consideration, which is required for any contract to be valid, no legal contract.

For anyone considering using this in a bakery situation where the wages are generally low, please be careful. Another factor for the legality of a non-compete is that the work is of a highly skilled nature, where R&D information and the skill provided by the company comes into play, such as a pharmaceutical lab.

Has anyone taken one of these to court and won? Just beware that taking one of these cases to court could cost you your home or business. In the case where your action, which proves to be illegal, cost the person their current job because the new employer doesn't want to be involved, the old employee is entitled to back wages and punitive damages.

Baker_Rose Posted 27 Sep 2011 , 5:40pm
post #15 of 16

"I agree that I shall not during, or at any time after the termination of my employment with (bakery), disclose or divulge to others including future employers, any trade secrets, methods, internal information, company plans, confidential information, or any other proprietary data of (bakery) in violation of this agreement.______"

What you are describing is that she is using a tool that you crafted yourself for your business. This statement reads to me as covering information secrets NOT tools. I would re-word it to somehow cover tools. I'm not a legal pro, but I do have a business law background.

It would be really hard, I mean really hard to prove that you have a method that is so unique, and so unusual that it is yours and your alone. There are strange things and ways that I have been doing things for YEARS that I thought I came up with on my own and then I sit down and read that VERY method or style in Cook's Illustrated. OR I think I came up with a different way to put together a recipe only to sit down with a very old book from the local used book sale to find "MY" way in print from 100 years ago.

There are only so many ways to put together a recipe and if you have something that is so new and revolutionary then you need to copyright/patent it to protect yourself.

There is a story I heard in Culinary School about the origin of puff pastry. No one really knows who came up with it. Many believe that it was an apprentice with a pastry recipe who screwed up and forgot to add the fat, after the dough was mixed he thought that he would just mix in the fat and all would be well, but when the pastry was baking it began to rise, and to form layers. At first the horror of the mistake, and the waste of the ingredients. But after baking he was intrigued and gave it a taste, to discover that this pastry was better than the original. Something new and different. The birth of a, now traditional, new pastry.

These days, there is very little new and different in the baking world. Maybe doing things a little different, in a different order etc, but truly new? Not really.

Tami

BizCoCos Posted 27 Sep 2011 , 7:53pm
post #16 of 16

I agree with you baker_rose, this has occurred to me many times and not solely with baking, I have come up with a design item only to see it on the same site I was about to list it on. I once read the following: Man's imagination can only go so far: attempt to create a monster that has no part of one that already exists in literature, movies, cartoons, try it, it is impossible. However, has the Coca cola recipe been truly recreated.? I'm sure that coke, pepsi, and so forth believe their recipes are unique. s other posters stated, if you take a recipe and tweak it, it is no longer the original. I try to give credit whenever I can it would upset me also if someone stole my unique recipes. Happy Caking!

Quote by @%username% on %date%

%body%