Contract Question--right of Company to communicate agreement obligations to other potential employer

[rhz10]

Jurisdiction

California

I've been given a research consulting agreement to sign which has the clause:

"Company may communicate the obligations contained in this Agreement to any other (or potential) client or employer of Consultant."

This gives the company the unqualified right to proactively and for any reason share the details of the agreement with any potential employer of mine in perpetuity. I suppose that the intent is to protect their IP. If this right were at least qualified to situations where there were concrete, active legal proceedings connected to potential IP loss, I would be willing to sign. They don't appear to be willing to budge on this. Otherwise, I see the clause as potentially jeopardizing my ability to work in the company's industry (or any other industry for that matter). Who would want to hire someone when their previous client waives a contract in their face and tells them "be careful?"

I have never had a contract with this clause before. Are my fears justified? (I'm in California.)

 

[adjusterjack]

I see the clause as potentially jeopardizing my ability to work in the company's industry (or any other industry for that matter).

That's certainly a possibility.

So, if you don't like it and they won't budge, don't sign it.

Seek employment elsewhere.

It's that simple.

 

[zddoodah]

Your post doesn't raise any legal issue. No one here will know if the sharing of this agreement (which none of us know anything about beyond the single, quoted sentence) with some hypothetical employer or client might impact that employer/client's decision to hire or do business with you.

 

[rhz10]

Your post doesn't raise any legal issue. No one here will know if the sharing of this agreement (which none of us know anything about beyond the single, quoted sentence) with some hypothetical employer or client might impact that employer/client's decision to hire or do business with you.

Thanks for your response. I am a research engineer. The agreement is for me to carry out a research project for a tech company. I will be exposed to the company's prior IP/trade secrets and, potentially, may generate IP for the company. The company would like protection against the possibility of me revealing or using any IP I may generate elsewhere. I believe that this is what motivates the clause. However, as the clause is worded it seems that they could share this contract with other employers for whatever reason they choose, and this could be damaging to my career.

So, if I had to frame a legal question, it would be this: Is it legal for them to share the contract with others in the absence of an IP dispute if the effect of sharing the agreement would cause other employers to not want to hire me because they'd feel intimidated by this company warning them to be careful about hiring me because of my previous contractual obligations (even there's no evidence of any impropriety on my part regarding their IP)? What modification of the clause should I propose to prevent this issue?

Thank you again.

 

[adjusterjack]

Is it legal for them to share the contract with others in the absence of an IP dispute if the effect of sharing the agreement would cause other employers to not want to hire me because they'd feel intimidated by this company warning them to be careful about hiring me because of my previous contractual obligations (even there's no evidence of any impropriety on my part regarding their IP)?

Yes, the bolded part is legal. That is what is in the contract. You sign it, you're bound by it.

The rest of your compound question has nothing to do with the contract and is only your fear of something bad that might happen at some future time. It might never happen.

What modification of the clause should I propose to prevent this issue?

Eliminate the provision or rewrite so it affords you more protection. But you've already noted that they won't budge on it.

 

[zddoodah]

Is it legal for them to share the contract with others in the absence of an IP dispute if the effect of sharing the agreement would cause other employers to not want to hire me because they'd feel intimidated by this company warning them to be careful about hiring me because of my previous contractual obligations (even there's no evidence of any impropriety on my part regarding their IP)?

I doubt the party with whom you're contracting could anticipate the effect of sharing it with someone. That aside, unless there is a law or a provision in the contract that says otherwise, a party to a contract may disclose the existence and/or terms of the contract to anyone it wants. I'm not aware of any law that prohibits such disclosure in any context (although I imagine there may be some laws in the context of contracts relating to national defense).

What modification of the clause should I propose to prevent this issue?

A modification that eliminates the sentence you quoted and adds a sentence that says exactly the opposite. However, you already told us that the company doesn't "appear to be willing to budge on this," so....