Understanding In-House Separation Agreements in the Hemp Industry
Say hello to the in-house separation agreement, a document that some employers use when they want their employees to go, but not without a few legal protections in place. But how do these agreements come into play with the growing hemp industry? In-house separation agreements are implemented by businesses to protect their most sensitive and valuable trade secrets. As it pertains to the hemp industry, these documents can be applied to all different sectors of the industry, including growers, retailers, distributors, testing labs, etc.
There are certain advantages and disadvantages when it comes to in-house separation agreements, especially for companies involved in the cannabis space. For one, cannabis companies should use these documents as a way to safeguard their trade secrets, but at the same time, this can have consequences. For instance, if the employee who just left your organization gave certain customers or clients his or her business in order to procure an increased rate of pay, the use of an comprehensive in-house separation agreements can be useful for a number of reasons.
For hemp companies, the contents of an in-house separation agreement can aid in the protection of a company’s interest in both their human capital and relationship with their clientele. For instance, you may find that the in-house separation agreement can help protect your organization from incurring increased costs related to having your goods or services marketed by a competitive entity. The document can also act as a deterrent from any further solicitation on behalf of the former employee.
Some of the major components of an in-house separation agreement that you may find are relevant to your cannabis-related business are similar to what you might find in other agreements associated with the industry. In general, you may see that an in-house separation agreement covers: The legal protections you get through an in-house separation are similar to what the law currently protects with regard to intellectual property. Therefore, it is in your best interest to learn as much as possible about your legal obligations and rights as they pertain to your assets and interests within your hemp business.
The realities of the in-house separation agreement are the same as the realities of much of the cannabis industry. Compared to other agreements, the in-house separation agreement’s primary focus is on divulging confidential information, prohibiting contract violation and avoiding the solicitation of clients. The enforcement of these agreements is generally straightforward. If you legally have the right to advise your employee to keep company secrets private, you can force your former employee to continue to comply with the agreement.
And while there may be some moments where you have to go to court to defend yourself and your business, this should not be a regular occurrence. In addition, the circumstances surrounding each in-house separation agreement is unique to the company and the separated employee; in some situations, an in-house separation agreement may be mandatory for the company to enforce, while in other instances, the company may choose to avoid using them altogether. Whether you decide to enforce such agreements is up to your company’s discretion.
In-house separation agreements are just one of many legal documents and protections that are available for businesses in the hemp industry. For a better understanding of in-house separation agreements, reach out to your legal team to help you better understand how this tool can be used to increase your protections and mitigate your risks within the growing cannabis space.
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