Vital Aid Protective Covenants Agreement

Proprietary Information and Protective Covenants Agreement VITAL AID
PROPRIETARY INFORMATION AND PROTECTIVE COVENANTS AGREEMENT
This Proprietary Information and Protective Covenants Agreement (“Agreement”) is entered into by and between _______________________ (“Employee”) and VITAL AID, LLC together with its parent companies, subsidiaries, affiliated companies, successors, and assigns to which employee provides services, if any (collectively “COMPANY”), and shall become effective immediately upon Employee’s employment with Company.  Employee and the Company are referred to individually as a “Party” and collectively as the “Parties” for purposes of this Agreement.
In consideration of the mutual representations, warranties, covenants and agreements set forth below, and for other good and valuable consideration, including Employee’s employment and/or continued employment and for other consideration, the receipt and sufficiency of which is hereby acknowledged, Employee and Company agree as follows:
1.	SPECIAL RELATIONSHIP OF TRUST AND DUTY OF LOYALTY.  The Company is engaged in the business of providing comprehensive non-medical home care services (the “Business”). Company is placing Employee in a special position of trust and confidence. In reliance upon the protective covenants in this Agreement, Company will provide Employee with one or more of the following: items of Proprietary Information (defined below); involvement in developing goodwill with customers and referral sources; and/or specialized training related to the Business and/or Company. Employee recognizes and agrees that Company would not be providing these benefits of employment in the absence of Employee’s promises contained herein.
2.	PROPRIETARY INFORMATION.
a.	Employee understands that, by virtue of Employee’s employment with the Company, Employee will acquire, create, and be exposed to Proprietary Information of the Company. For purposes of this Agreement, “Proprietary Information” is defined as follows:
i.	All ideas, information and materials, tangible or intangible, not generally known to the public, relating in any manner to the business of the Company, its products and services (including all trade secrets), its officers, directors, and contractors, its actual and prospective customers, vendors and suppliers, and all others with whom it does business, its trade secrets, and financial information, including, without limitation, revenue sources, profit margins, pricing data, sales information, customer identities and preferences, referral sources, commissionable amounts payable with respect to sales revenue, individual facilities’ profitability, operating income, operating expenses, gross profit charts, and profit-loss statements, project bid methods, price and cost data, pending projects and proposals, marketing or corporate strategies that Employee learns or acquires during Employee’s employment with the Company; and
ii.	All non-public information of any person or entity owned by, controlled by, or affiliated with the Company, and the non-public information of any other person or entity to whom or which the Company owes a duty of confidentiality including the Company’s customers.
iii.	Proprietary Information does not include (i) publicly-available information or information that is generally known and used within the industry or industries in which Company engages in Business, (ii) information that becomes publicly known through lawful means and without breach of this Agreement or a similar agreement binding on a third party, (iii) Employee’s general knowledge and skills, and (iv) information lawfully acquired by a non-management employee about wages, hours or other terms and conditions of non-management employees solely if used by them for purposes protected by §7 of the National Labor Relations Act.
b.	During and after Employee’s employment with the Company, (i) Employee shall hold in trust and confidence all Proprietary Information, (ii) Employee shall not disclose any Proprietary Information to anyone outside the Company without the written approval of an authorized officer of the Company, (iii) Employee shall not use any Proprietary Information for any purpose other than for the benefit of the Company as required by Employee’s authorized duties for the Company, and (iv) Employee shall comply with all of the Company’s policies, procedures, regulations or directives relating to the protection and confidentiality of Proprietary Information.
c.	Upon separation of Employee’s employment with the Company for any reason, (i) Employee shall not use Proprietary Information, or disclose Proprietary Information to anyone, for any purpose, unless expressly requested and authorized to do so in writing by an authorized corporate officer of the Company, (ii) Employee shall not retain or take with Employee any Proprietary Information in a Tangible Form (defined below), (iii) Employee shall not retain copies of any Proprietary Information, and (iv) Employee shall immediately deliver to the Company all Proprietary Information in a Tangible Form (or otherwise) that Employee may then or thereafter hold or control and all other property, equipment, documents or things that Employee was issued or otherwise received or obtained during Employee’s employment with the Company, other than wage and benefit related materials provided to Employee as an employee for Employee’ own use as an employee of the Company. “Tangible Form” includes ideas, information or materials in written or graphic form, on a computer disc or other medium, or otherwise stored in or available through electronic, magnetic, videotape or other form.
d.	Pursuant to the Defense of Trade Secrets Act (“DTSA”),  Employee shall not be held criminally or civilly liable under any U.S. Federal or State trade secret law for the disclosure of a trade secret that is made (i)(a) in confidence to a U.S. Federal, State or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  If Employee files a lawsuit against Company for retaliation by Company for reporting by you of a suspected violation of law, Employee may disclose the trade secret to Employee’s attorney and use the trade secret information in the court proceeding, if Employee (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement is intended to conflict with U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).  
3.	NON-INTERFERENCE WITH BUSINESS RELATIONSHIPS.
a.	Employee acknowledges that a simple agreement not to disclose or use the Company’s Proprietary Information, standing alone, would be inadequate to protect the Company against the kind of irreparable harm that could be caused by Employee engaging in certain types of conduct.  In particular, Employee acknowledges that Employee, by virtue of employment with the Company, will represent the Company in developing and maintaining relationships with the Company’s new and existing customers, referral sources, and others with whom the Company does business.  As a result of these close and unique relationships, Employee will be in a position to develop significant goodwill with such parties with whom you deal on behalf of the Company, that would provide Employee with the ability to engage in unfair competition in obtaining the business of such persons if Employee utilizes such relationships on behalf a competitor of the Company.  Accordingly, to help prevent irreparable harm from the loss of Company’s customer goodwill, Employee agrees as follows:
b.	While employed and for a period of one year following the termination of Employee’s employment with the Company (whatever the cause), Employee will not, directly or through a third party (including a Restricted Customer’s family members), contact, solicit, or communicate with a Restricted Customer or Restricted Referral Source of the Company for the purpose of encouraging, causing or inducing such Restricted Customer or Restricted Referral Source to cease or reduce doing business with the Company, modify their relationship with the Company to the Company’ detriment, or to divert in-home care or related opportunities to a Competing Business, nor will Employee assist any other person or entity in so doing. “Restricted Customer” is a Company client, customer, customer’s family member or guardian with whom Employee had business-related contact or dealings or about whom Employee received Proprietary Information during the Look Back period. “Referral Source” means a person or entity who has provided two or more customer/patient referrals to the Company during the Look Back Period. “Referral Source” specifically includes, but is not limited to, any physician, surgeon, medical doctor, doctor of osteopathy, nurse, therapist, hospitalist, discharge planner, volunteer, patient family member, colleague, Medical Director, Assistant Medical Director, health care provider, or representative of any senior living facility (inclusive of assisted living facilities, independent living facilities, nursing homes or skilled nursing facilities) who orders, refers, or arranges for the provision of in-home senior care services, or any nursing or clerical staff under the supervision of the foregoing. A “Restricted Referral Source” is a Referral Source with whom Employee had business-related contact or dealings or about whom Employee received Proprietary Information during the Look Back period. “Look Back Period” refers to the last year of Employee’s employment with Company. “Competing Business” means a person or entity other than the Company that is engaged in the Business or planning to become engaged in the Business within 50 miles of any location at which Employee worked on behalf of the Company.
4.	NON-SOLICITATION OF PERSONNEL.  
a.	During Employee’s employment with the Company and for one (1) year thereafter, Employee shall not, directly or through others, hire or cause to be hired, a Covered Employee to work for a Competing Business or communicate with a Covered Employee for the purpose of interfering with or severing the Covered Employee’s employment relationship with the Company for the purpose of working for a Competing Business. A “Covered Employee” is an employee of the Company who Employee had business-related communications with or about whom Employee learned Proprietary Information during the last year of Employee’s employment with the Company. This Section does not apply to the publication of job advertisements or listings to the general public (i.e., listings on Internet job boards) that are not direct to one or more specific employees of the Company or the employees of the Company generally.
b.	Employee acknowledges that breach of the Non-Solicitation provision will subject the Company to irreparable harm which is not easily calculable in monetary terms. Accordingly, the Company shall be entitled to 30% of the applicable Covered Employee’s annual compensation as liquidated damages for each violation. Employees agree that the amount of damages the Company would suffer in the event of a breach in engaging in efforts to replace the Covered Employee, train a replacement employee, and lost productivity from the loss of an experienced employee is not susceptible to calculation with certainty. Accordingly, the amount of liquidated damages is the Company’s and Employee’s best reasonable calculation of damages that the Company will likely incur for each breach and that it is not a penalty.
5.	RETURN OF DOCUMENTS AND MATERIALS.  Immediately upon the termination of Employee’s employment or at any time if requested by the Company, Employee shall return all property of the Company, including, but not limited to, Proprietary Information, and further including computers, software, storage media, operating systems, network accounts, e-mail accounts and systems,  access credentials, documents, files, vehicles, devices, customer and employee lists and contacts, and all other Company property of any type, tangible or electronic.  After return of property to the Company, Employee agrees to permanently delete any electronic copies or files of any Company property and provide written certification of such deletion.  Employee shall not make or retain any copies of any Proprietary Information upon termination of employment.
6.	PROPRIETARY INFORMATION OF OTHERS/COMPLIANCE WITH LAWS. Employee shall not breach any lawful, enforceable agreement to keep in confidence, or to refrain from using, the nonpublic ideas, information or materials of a third party, including, but not limited to, a former employer or present or former customer. Employee shall not bring any such ideas, information or materials to the Company, or use any such ideas, information or materials in connection with Employee’s employment by the Company. Employee shall comply with all national, state, local and other laws, regulations and ordinances. Nothing in this Agreement shall eliminate, reduce, or otherwise remove any legal duties or obligations that Employee would otherwise have to the Company through common law or statute.
7.	RIGHTS AND REMEDIES UPON BREACH. The Parties agree that in the event of a breach, or threatened breach, o, any of the provisions of this Agreement, the non-breaching Party (in aid of arbitration if Employee is subject to an arbitration agreement and as a provisional remedy in such arbitration (or permanent remedy in such arbitration if so ordered)), shall have the right and remedy to have each and every one of the covenants in this Agreement specifically enforced and the right and remedy to obtain temporary and permanent injunctive relief.  Employee acknowledges and agrees that any breach or threatened breach of any of the covenants and agreements contained herein would cause irreparable injury to the Company and that money damages would not provide an adequate remedy at law to the Company. Moreover, if Employee breaches or threatens to commit a breach of this Agreement during Employee’s employment with the Company, Employee may be subject to immediate termination. In any proceeding seeking to enforce Sections 1 through 4 of this Agreement, the prevailing Party shall be entitled to recover all reasonable attorneys’ fees, costs and expenses, including any expert fees, that were incurred by that Party in connection with any such proceeding.
8.	SEVERABILITY/BLUE-PENCIL. The Parties acknowledge and agree: (a) that if any duly-appointed arbitrator (if applicable) or court of competent jurisdiction subsequently determines that any of such covenants or agreements, or any part thereof, is invalid or unenforceable, the remainder of such covenants and agreements shall not thereby be affected and shall be given full effect without regard to the invalid portions; and (b) if any such arbitrator or court determines that any of the covenants and agreements, or any part thereof, is invalid or unenforceable because of the duration or scope of such provision, such arbitrator or court shall have the power to reduce or modify the duration or scope of such provision, as the case may be, and, in its reduced or modified form, such provision shall then be enforceable to the maximum extent permitted by applicable law.
9.	GOVERNING LAW. This Agreement shall be construed, interpreted, and governed in accordance with either (a) the laws of Maryland, or (b) in the event of a breach of any of the covenants contained in Sections 1 through 4, the law of the state where such breach actually occurs, depending on whichever choice of law shall ensure to the maximum extent that the covenants shall be enforced, irrespective of any conflict of law rules.
10.	ENTIRE AGREEMENT/MODIFICATION/NO WAIVER. This Agreement (a) represents the entire agreement of the Parties with respect to the subject matter hereof, (b) shall supersede any and all previous contracts, arrangements or understandings between the Parties hereto with respect to the subject matter hereof, and (c) may not be modified or amended except by an instrument in writing signed by each of the Parties hereto or by order of a court of competent jurisdiction or duly-appointed arbitrator. This provision does not supersede any arbitration agreement, compensation agreement or other agreement executed by Employee that does not pertain to the subject matter of this Agreement.
11.	PARTIES IN INTEREST/ASSIGNMENT/SURVIVAL. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by Employee. The Company may sell, assign, and transfer all of its right, title and interests in this Agreement without the prior consent of Employee, whether by operation of law or otherwise, in which case this Agreement shall remain in full force after such sale, assignment or other transfer and may be enforced by (a) any successor, assignee or transferee of all or any part of Company’s business as fully and completely as it could be enforced by the Company, and (b) the Company in the case of any sale, assignment or other transfer of a part, but not all, of the business. Employee’s duties and obligations under this Agreement shall survive the termination of Employee’s employment with the Company and shall, likewise, continue to apply and be valid notwithstanding any change in Employee’s duties, compensation, responsibilities, position or title and/or the assignment of this Agreement by Company.
AGREED:
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