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Non-Disclosure Clause

Severance Agreements And Non-Disclosure Clause: Can You Use What You Learned In Your Job To Consult Other Companies?

Severance from employment whether due to your resignation at will or retirement often requires severance contract between you and your employer. This Contract usually embodies the compensation you get from your departure in an employment position. As in retirement, an employer may offer severance package to a retiree as compensation for his/her years of service to the company, along with being an exchange for the employee’s waiver of right to sue.

Severance Agreement is a contract between the retiree and the employer specifying the terms of employment termination. This is also offered to employees who are being laid off. Usually, Severance Agreements have consideration, which could include something of value which the employee is not already entitled yet.

Employers usually provide employee time to consider the Severance Agreement before signing the same. For retirees, the Older Workers Benefit Program requires that the employer provide the employees over the age of 40 with a 45-day consideration period and at least 7-day revocation period.

This Agreement also often include a Waiver or General release stipulation that the employee cannot sue his or her former employer due to wrongful termination or attempt to seek other unemployment benefits.

Non-Compete and Non-Disclosure Clause


Depending on the retiree’s previous position and particular profession, some companies include in their Severance Agreement a Non-Compete Clause.

This Clause serves as a contract between the retiree and his/her employer which stipulates that the departing employee agrees not to enter into or start a similar profession/company in competition against the business of the employer. This Agreement is usually limited within a geographic area or for a limited time after he/she terminates the employment.

If the retiree decides to work again and accepts a position that the former employer believes to be in violation with the Non-Compete Agreement, the former employer may sue the retiree in court to prevent him/her from working.

The Non-Compete and Non-Disclosure Agreement is intended to protect the previous employer’s existing client base. The Non-Disclosure Agreement, too, is intended to protect the company from disclosure by the previous employee of company and trade secrets to the former’s disadvantage.

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