Explore BrainMass

Business law: Non-compete vs non-disclosure clause

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

What are the advantages and disadvantages of a non-compete clause as opposed to a non-disclosure clause?

© BrainMass Inc. brainmass.com March 21, 2019, 4:20 pm ad1c9bdddf

Solution Preview

Business law question

The advantages and disadvantages of a non-compete clause as opposed to a non-disclosure clause are:

Non-disclosure clauses appear to be much less restrictive than non-compete clauses because they do not prevent an employee from working with others; it simply restricts "disclosure" or giving information away, while non-compete restricts competition or "working," which is designed to limit one's ability to change employers, work for a competitor, or for one's self.

If I had to choose between a non-compete or a non-disclosure clause, I would choose the latter. Non-disclosures are much easier to deal with; they can be as simple as ca. a restaurant employee not being allowed to give an employer's recipe away; however, conversely, a non-compete may prevent an employee from working at another restaurant for a certain period of time during, or after a contracted employment for which the non-compete clause applies (very restrictive).

Harvard Business School says that, "It might seem that Non-Disclosure Agreements (NDAs) would guard against the loss of trade secrets and other IP, but such agreements are notoriously difficult to police. Moreover, employers have alleged that even those with the most noble intent of upholding their NDAs will "inevitably disclose" what they know in the course of everyday work."
Reference: http://hbswk.hbs.edu/item/5628.html

Non-disclosures are said to be the same as "confidentiality" agreements; in other words an employee must avoid disclosing (intellectual property "IP") information about an employer or any other trade secret to anyone. UNCC.edu ...

Solution Summary

In a 900+ word solution, the comparison between non-compete clauses and non-disclosure clause is explored in detail. The solution contains a good selection of links to current news articles as well as scholarly references.