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Rehiring a terminated employee and nondisclosure agreements

Sometimes in the course of business, it is beneficial or necessary to rehire an employee who has previously been terminated. This can be complicated for a number of reasons, and the new employment contract should receive the same attention and scrutiny that a contract for a new employee would. One common oversight that can lead to difficulties later on is inattention to executing a new non-disclosure agreement, or NDA, as part of the new contact.

In some cases, employees may assume that because of a short period of time between an employee being terminated, the original NDA remains in effect. Depending on the terms of the NDA, this may be true, but not always. Perhaps an employer institutes a standard two-year post-termination NDA in an employee’s contract, and after 18 months terminates the employee. Circumstances dictate that the employer decides to rehire the terminated employee several weeks later. For whatever reason, the employer chooses to terminate the employee again after three more years. In return, the terminated employee goes directly to a competitor and apparently violates the NDA. In scenarios like this, the employer may be unable to enforce the original NDA, since the original term has expired.

While such circumstances are rare, taking special care in the contract writing phases of any hire or rehire scenario will help to avoid many potential future headaches and drain on your business through lost time and resources due to a contract-related disputes. The guidance of experienced legal counsel can help protect your interests and navigate the complex landscape of contract writing.

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