When an agreement terminates, the party is over. Right?
Well, yes and no.
Yes, termination, cancellation and any other way you can say THE END signals the parting of ways between the parties and the end of an agreement.
But no, some terms of an agreement may survive THE END. Rights and duties that accrued during the term of the agreement, for example, such as the duty to pay outstanding balances typically survive termination of the agreement.
Open invoices are an obvious example. But don’t forget other types of obligations that you may want to survive the end of a contract term such as a duty of confidentiality regarding your proprietary information.
The ongoing duty of confidentiality may apply not only to the exchange of confidential information between companies, but also the often confidential exchange of information between employer and employee.
Just because an employee moves on to another company doesn’t mean the coast is clear for divulging a past employer’s trade secrets. That point was sharply driven home recently in the Bratz doll case.
Created by toy designer Carter Bryant and made by MGA Entertainment, the Bratz doll became heavy competition for Mattel’s Barbie doll. In the lawsuit that followed, Mattel claimed Mr. Bryant’s Bratz design work began while he was still employed at Mattel. The company further claimed that under the terms of his employment agreement, all doll designs made by Bryant during his employment at Mattel, including the Bratz doll designs, belonged to Mattel. A jury agreed and awarded Mattel $100 million in damages
To avoid getting drawn into an ugly trade secret battle, it’s wise for prospective employers to inquire during the interview process about a candidate’s confidentiality obligations with past or present employers. And as for eager job candidates who say they have none and tout how they are free to share whatever they know: beware. Will they freely share your information tomorrow?