Employee, Founder, and Mobility IP Toolkit: Covenants, Departures, and Ownership Disputes

By Casey Scott McKay · 2025-03-25

People carry intellectual property in their heads and on their laptops, and every hire and every departure moves some of it. This toolkit maps the whole area: the assignment paperwork that determines who owns what an employee or contractor creates, the trade secret program that has to exist before a departure to matter afterward, the restrictive covenants whose enforceability now varies enormously by jurisdiction and is narrowing, and the founder and partnership disputes where the brand itself is the contested asset. It covers onboarding controls that prevent importing somebody else's trade secrets, exit procedures that produce usable evidence, and the litigation decision that most companies make too quickly in both directions. It treats the incoming side as seriously as the outgoing side, because the company hiring a competitor's engineer has the harder problem. It closes with a cost map, an authorities table, and the forms that paper each step.

IP and Technology > Trade Secrets | Toolkit | Published 25 March 2025 - Updated 1 April 2026 | Casey Scott McKay - marksy.us

Summary. People carry intellectual property in their heads and on their laptops, and every hire and every departure moves some of it. This toolkit maps the whole area: the assignment paperwork that determines who owns what an employee or contractor creates, the trade secret program that has to exist before a departure to matter afterward, the restrictive covenants whose enforceability now varies enormously by jurisdiction and is narrowing, and the founder and partnership disputes where the brand itself is the contested asset. It covers onboarding controls that prevent importing somebody else's trade secrets, exit procedures that produce usable evidence, and the litigation decision that most companies make too quickly in both directions. It treats the incoming side as seriously as the outgoing side, because the company hiring a competitor's engineer has the harder problem. It closes with a cost map, an authorities table, and the forms that paper each step.

Keywords: noncompete · restrictive covenants · employee mobility · trade secrets · dtsa · inevitable disclosure · invention assignment · work made for hire · contractor assignment · founder disputes · exit interview · forensic imaging · onboarding · garden leave · nonsolicitation · confidentiality agreement · departure checklist · ownership disputes · brand ownership · prior inventions

Start Here

Four people leave a company in one quarter, and each departure is a different problem.

A senior engineer joins a direct competitor. She had access to the architecture, the roadmap, and the customer performance data. Her employment agreement has a noncompete that may or may not be enforceable where she lives.

A designer who was never an employee — a contractor for six years — has been working under a statement of work that says the company owns "all deliverables" and says nothing about copyright assignment.

A co-founder departs after a disagreement about direction. He registered the company's original social handles on a personal email, and he believes the brand name was his idea and remains his.

And a sales lead takes a customer list to a competitor and begins calling accounts within a week.

Four departures, four bodies of law, and one shared fact: the outcome in each was determined by paperwork signed years earlier, or not signed at all.

This toolkit answers three questions.

Who owns what people create? And what has to be signed, by whom, when.
What survives a departure? Trade secret obligations, restrictive covenants, and the practical measures that make either enforceable.
What do you do on the day someone leaves — and on the day someone arrives? Because the incoming risk is larger and less managed than the outgoing one.

If you read only one thing, read Who Owns the Work. The contractor gap it describes is the most common and most expensive defect in this entire area, and it is completely preventable with one signature.

Part One: Ownership

Employees and copyright. Work prepared by an employee within the scope of employment is a work made for hire, and the employer is the author. 17 U.S.C. § 201(b). The scope question is real — work done on personal time, outside job duties, and without employer resources may fall outside it — which is why an assignment agreement is used regardless.

Contractors and copyright. A commissioned work is a work made for hire only if it falls within one of the enumerated categories in 17 U.S.C. § 101 and there is a signed written agreement saying so. Software, most designs, and most photography are not in the categories. A "work for hire" recital in a contractor agreement therefore transfers nothing by itself, and the fix is a present-tense assignment. Any transfer of copyright ownership requires a signed writing under 17 U.S.C. § 204(a).

Patents. Inventorship follows conception, and ownership follows from assignment. An employee inventor owns the invention absent an agreement; an obligation to assign is not the same as an assignment, and the drafting distinction between "will assign" and "hereby assigns" has decided cases. 35 U.S.C. § 261.

Trademarks. Ownership vests in the party that controls the nature and quality of the goods or services sold under the mark, which is why a founder who "came up with the name" does not own it if the company used it. 15 U.S.C. § 1055; 15 U.S.C. § 1127. See Whose Brand Is It?.

Trade secrets belong to the party that developed them and took reasonable measures to protect them, and the employment relationship supplies the confidentiality obligation.

The invention assignment agreement should cover: a present-tense assignment of all intellectual property created in the course of employment; a disclosure obligation; a prior inventions schedule the employee completes at hire; cooperation in prosecution; a moral rights waiver where applicable; and — importantly — the statutory carve-outs several states require for inventions developed entirely on the employee's own time without employer resources and unrelated to the business. Omitting a required carve-out can render the whole provision unenforceable in those states.

The prior inventions schedule matters more than anyone treats it. An employee who lists nothing at hire and later claims to have brought something in has a problem; an employee who lists something has preserved it. Collect it, and keep it.

Part Two: The Trade Secret Program

The definition. Information deriving independent economic value from not being generally known and not readily ascertainable, subject to reasonable measures to keep it secret. 18 U.S.C. § 1839(3).

The federal claim. 18 U.S.C. § 1836 provides a civil action for misappropriation, with injunctive relief, damages for actual loss and unjust enrichment or a reasonable royalty, exemplary damages up to twice the award for willful and malicious misappropriation, attorney's fees, and civil seizure in extraordinary circumstances.

"Reasonable measures" is the entire case. Courts assess: written confidentiality agreements with employees, contractors, and vendors; access controls limiting information to those who need it; labeling and classification; network segmentation and logging; physical controls; onboarding training; exit procedures; and policies that are actually enforced rather than merely written.

Identify the secrets. A company that cannot say what its trade secrets are cannot protect them and cannot plead them with the particularity a court will require. Maintain an inventory, updated annually.

The particularity problem in litigation. Pleading a trade secret requires identifying it with enough specificity for the defendant to defend and the court to adjudicate — which means disclosing it, under protective order, to the party you are suing. Discuss this with the client before filing.

Immunity notice. 18 U.S.C. § 1833(b) requires that a notice of whistleblower immunity be included in agreements governing trade secrets with employees and contractors; omitting it forfeits exemplary damages and fees against that individual. It is one sentence and it is left out constantly.

See Trade Secrets and the DTSA; Building a Trade Secret Program That Survives Litigation; Trade Secret Protection and Departure Checklist.

Part Two-and-a-half: Building the Trade Secret Inventory

The inventory is the artifact courts look for and companies almost never have, and building it is a two-day exercise rather than a project.

Interview the people who know. Engineering, product, sales, and operations leads, asked one question: what does this company know that a competitor would pay for and cannot easily learn? The answers cluster quickly.

Sort into four categories. Technical — algorithms, formulations, processes, architectures, test data, tooling. Commercial — pricing logic, margin structures, supplier terms, cost data. Customer — account-level information, buying patterns, contacts, contract terms. Strategic — roadmaps, expansion plans, acquisition targets, unannounced product work.

For each item, record the essentials. A description specific enough to identify it without disclosing it in the inventory itself. Where it lives. Who has access. What controls apply. Whether it is disclosed to any third party, and under what agreement. And its value, described qualitatively — because independent economic value from secrecy is an element, and asserting it later without ever having articulated it is weak.

Then use it. The inventory drives access controls: information nobody has classified will be accessible to everyone by default. It drives the confidentiality provisions in vendor agreements. It drives what the exit interview asks about. And it drives the pleading if litigation ever comes, because the identification requirement is satisfied far more easily from an existing inventory than from a reconstruction under deadline.

Update it annually, and update it whenever a major project concludes. Trade secrets are created continuously and inventoried almost never.

One caution. The inventory itself is sensitive and should be treated accordingly — access-controlled, marked, and, where prepared with counsel for the purpose of legal advice, structured with privilege in mind. An inventory circulated freely is a roadmap.

Part Three: Restrictive Covenants, Honestly

This is the area where the law has moved most, and where jurisdiction-specific advice is unavoidable.

Noncompetes. Enforceability ranges from routine to categorically prohibited depending on the state, and the trend across jurisdictions has been toward narrowing — through income thresholds, occupational carve-outs, notice requirements, garden-leave requirements, and outright bans in some states. Regulatory efforts at the federal level have added further uncertainty. Never advise on a noncompete without checking the current law of the governing state, and be skeptical of a choice-of-law clause selecting a permissive state for an employee who works elsewhere; several states refuse to enforce such clauses against their residents.

Nonsolicitation of customers is generally more enforceable than a noncompete, particularly where limited to customers the employee actually served.

Nonsolicitation of employees is enforceable in many places, subject to reasonableness and, in some jurisdictions, antitrust scrutiny where it operates between employers rather than within an employment agreement. No-poach agreements between competitors are a serious antitrust exposure, not a covenant question.

Confidentiality agreements are enforceable nearly everywhere, and an overbroad one — purporting to cover general skills and publicly available information — invites a court to narrow or disregard it.

Inevitable disclosure is accepted in some jurisdictions and rejected in others, and where accepted it is applied narrowly. The DTSA expressly limits injunctions that would prevent a person from entering an employment relationship, and conditions on employment must be based on evidence of threatened misappropriation rather than on what a person knows. 18 U.S.C. § 1836(b)(3)(A).

Garden leave — paid notice during which the employee does not work — is increasingly used as an alternative and is required as a condition of enforceability in some places.

The practical drafting advice. Draft the covenant you would actually enforce, in the narrowest form that protects the interest, with a term and a geographic scope tied to something real. Overbroad covenants are struck, narrowed, or ignored, and in some states an overbroad covenant carries a penalty.

See Where an Employee Can Go.

Part Four: Onboarding, the Harder Problem

The company hiring a competitor's employee has more exposure than the company losing one, and almost nobody manages it.

Ask what obligations the hire is under. Get the prior agreements, read them, and assess the covenants under the correct state's law before the start date.

Instruct in writing. Do not bring, access, or use any material from the prior employer. Do not solicit prior colleagues or customers in violation of any covenant. Return everything to the prior employer. Put it in writing and have the hire acknowledge it, because that document is the company's best evidence if a claim follows.

Prohibit the import. No personal devices with prior-employer data. No cloud accounts. No "my own notes" from the prior job. This is where cases start.

Assign work carefully in the first months, particularly where the hire's prior role overlapped closely.

Collect the prior inventions schedule at hire.

Screen where the risk is high. A senior hire from a direct competitor may warrant a documented protocol restricting their involvement in specific projects for a period.

Why this matters. A claim against your company for misappropriation by a new hire is far more damaging than a claim by your company against a departed one, and it is more preventable. Companies that do this well can demonstrate, contemporaneously, that they told the hire not to bring anything and took steps to ensure they did not.

Part Five: The Departure

Before the departure, if you know it is coming. Preserve access logs. Review recent download, print, and email-forwarding activity. Restrict access to the most sensitive material where appropriate and lawful. Do not do anything that looks retaliatory.

On the day. Revoke access — every system, including the ones nobody remembers: the shared password manager, the code repository, the analytics account, the marketplace seller account, the domain registrar. Collect devices. Collect physical materials.

The exit interview. Remind the departing person of continuing obligations, identify where they are going and in what role, ask whether they retain any company material, and obtain a signed certification that they have returned everything and retained nothing. That certification does real work later.

Forensics, where warranted. Image the device before it is reissued, and do it promptly, because reissuing a laptop destroys the evidence. Whether to review the image is a separate decision; preserving it is cheap and irreversible if skipped.

Look at the digital assets. Accounts registered in the individual's name, two-factor tokens on their phone, and handles on personal email addresses. This is where the co-founder problem in the opening scenario lives. See Platform Account Risk Checklist.

Notify where appropriate. Where covenants apply and the destination is a competitor, a professional and factual letter to the individual — and sometimes to the new employer — preserves the position without escalating. Overreaching here produces a tortious interference counterclaim.

And decide about litigation deliberately. Most departures do not warrant it. The cases worth bringing involve documented exfiltration, a covenant that is enforceable where it matters, and a business impact large enough to justify the cost and the disclosure.

Part Five-and-a-half: The Evidence Problem

Departure cases are decided on evidence that either exists on day one or never exists at all.

What preserves well. Access logs, download and print records, email forwarding rules, cloud sync activity, badge records, and version control history. Most of these are retained by default for a limited period and then overwritten, which is why the preservation decision is urgent rather than considered.

What disappears fastest. Laptop contents once the device is reimaged and reissued, which frequently happens within days. Chat histories under short retention policies. Personal cloud accounts, which the company never controlled. And the departing person's memory of what they said in the exit interview, which is why a signed certification is worth more than a conversation.

Set a preservation trigger. Any departure to a known competitor, any departure from a role with access to the inventory's contents, and any resignation that follows unusual activity should trigger: suspension of routine deletion, imaging of devices before reissue, and export of access logs. Make it a standing procedure rather than a case-by-case judgment, because the judgment is made under time pressure by people who are focused on the transition.

Distinguish preservation from investigation. Preserving is cheap, fast, and carries essentially no downside. Investigating — forensic review, expert analysis, interviews — is expensive and should follow a reason. Companies routinely get this backwards, skipping preservation and then commissioning an investigation three months later against evidence that no longer exists.

Respect the limits. Monitoring and forensic examination are governed by employment law, privacy law, and — where personal devices or accounts are involved — computer access statutes. Reviewing an employee's personal email account without authorization is not a permissible investigative step, and doing it converts the company from claimant to defendant. 18 U.S.C. § 1030; 18 U.S.C. § 2701.

And document the chain. An image with no chain of custody, or a log export nobody can authenticate, is evidence that will be contested at exactly the moment it matters.

Part Six: Founder and Partnership Disputes

The hardest category, because the asset in dispute is usually the brand itself and the parties know each other.

Who owns the mark. Not who thought of the name. Ownership follows control over the nature and quality of the goods or services, which usually means the entity that sold under it. 15 U.S.C. § 1055. Where two people operated jointly with no entity, the analysis is genuinely difficult and the outcome frequently unsatisfying.

Joint ownership is a bad outcome. Co-owners may each use the mark without accounting to the other, which makes quality control impossible and the mark vulnerable. Avoid it in structuring, and resolve it in separation.

The digital assets are the practical battleground. Handles, domains, and accounts registered personally. Recovery theories for intangible accounts are unreliable, and the contractual and platform routes are usually faster. See Domain Portfolio Checklist.

The separation agreement should address which party keeps the mark, whether the other may use a modified form, a transition period, digital asset transfer with credentials, customer communication, mutual releases, and non-disparagement.

Prevention is a founders' agreement signed in year one, addressing IP assignment, brand ownership, what happens on departure, and how the accounts are held. It takes an afternoon and it prevents the most expensive dispute a small company can have.

See Whose Brand Is It?; Resolving a Founder or Partnership Brand Dispute; Startup and Founder Brand Toolkit.

Part Seven: Litigation, and Whether To

What a plaintiff must have. An identified trade secret, reasonable measures documented, evidence of misappropriation rather than suspicion, and a business impact worth the cost.

What evidence actually looks like. Access logs showing unusual downloads before departure. Files on a personal device or cloud account. A competitor product incorporating something non-obvious. Customer communications using company materials. Forensic artifacts of mass copying.

What it does not look like. An employee going to a competitor and being good at their job. Similar products in a category where the approach is well known. Customers following a salesperson they liked.

Speed matters. Preliminary relief requires promptness, and a plaintiff who waited six months has undermined its own urgency argument.

The counterclaim risk. Tortious interference, defamation, and — where the covenant is unenforceable or the assertion is baseless — unfair competition and abuse of process. Assert only what you can support.

The disclosure cost. Pleading with particularity means telling the defendant what the secret is.

And the honest counseling point. Clients in this area are usually angry, the cases are expensive, and a meaningful share of them are brought to send a message rather than to remedy a harm. Sending a message is a legitimate business objective and should be named as such, with its price attached, rather than dressed up as a legal necessity.

See Trade Secret Protection Toolkit.

Part Ten: The Ten Documents Nobody Signed

Diligence teams and litigators find the same gaps repeatedly. This is the list, in rough order of how often it appears.

One: a contractor with no assignment. The single most common defect in every portfolio, in every industry.

Two: an employee hired before the company had an agreement template, whose foundational work is unassigned.

Three: a founder whose contributions predate the entity, with nothing transferring them into it.

Four: an agency that signed, but whose individual designers or developers did not.

Five: a confidentiality agreement without the immunity notice required by 18 U.S.C. § 1833(b), forfeiting exemplary damages and fees.

Six: an invention assignment missing the statutory carve-out required in the employee's state, potentially voiding the provision.

Seven: an "agrees to assign" clause where a present-tense assignment was needed.

Eight: no prior inventions schedule, so nobody knows what a key employee brought in.

Nine: an intern, an advisor, or a summer contributor whose work shipped and who signed nothing.

Ten: a company account registered to an individual, which is not a document problem but is discovered in the same review and is often the most disruptive.

The remediation. Confirmatory assignments, obtained proactively and while relationships are good. They cost a modest payment and an hour, and they are dramatically harder to obtain once a transaction is announced, a dispute is live, or the person has become a competitor. Run the list annually against the current roster and the past three years of engagements, and close what it finds.

Part Eight: Cost Map

| Item | Relative cost | When | |---|---|---| | Invention assignment and confidentiality agreements | Very low | At hire, every hire | | Contractor assignments | Very low | Before engagement | | Founders' agreement | Low | Year one | | Trade secret inventory and controls | Moderate, recurring | Ongoing | | Onboarding protocol for competitive hires | Low | Per hire | | Exit procedure with certification | Very low | Per departure | | Forensic imaging | Low per device | At departure, where warranted | | Forensic review and expert analysis | High | Only when investigating | | DTSA litigation with preliminary relief | Very high | Rarely, deliberately | | Founder brand dispute | Very high per dollar at stake | Avoidable with paperwork |

The ratio. The entire preventive stack — agreements at hire, contractor assignments, a founders' agreement, an exit procedure — costs almost nothing and prevents nearly all of the expensive outcomes. It is the clearest cost-benefit case in this whole shelf, and it is skipped constantly because none of it feels urgent on the day it should be done.

Part Nine: What Happened to the Four Departures

The engineer. Her noncompete was governed by a state that does not enforce them, and the company's counsel advised against asserting it. What the company did instead was correct: it preserved her access logs, imaged her device, found no evidence of exfiltration, sent a professional letter reminding her of continuing confidentiality obligations, and copied her new employer. Nothing further happened. The cost was a few thousand dollars and the outcome was as good as litigation would have produced.

The contractor. The statement of work said the company owned "all deliverables," which is a phrase that transfers no copyright. 17 U.S.C. § 204(a). He signed a confirmatory assignment for a modest payment, covering six years of design work including the current brand identity. He was cooperative. The company then changed its contractor template, which was the actual fix.

The co-founder. The hardest one. The mark belonged to the company, because the company had sold under it and controlled quality — the fact that he suggested the name was irrelevant as a matter of law and enormously relevant as a matter of feeling. The handles were the real fight: registered to his personal email, with recovery to his phone. The resolution was a separation agreement transferring the accounts with credentials, a mutual release, a non-disparagement clause, and an agreed communication. It took four months and a mediator, and it would have taken an afternoon in year one.

The sales lead. The customer list was a trade secret only to the extent it was not readily ascertainable and was actually protected, and the company's controls were thin. The nonsolicitation covenant, limited to accounts he had personally served, was enforceable in the governing state and was the effective instrument. A letter enforcing it, plus a documented reminder to the accounts of the company's own relationship, resolved it without litigation.

The common thread. In three of four, the answer was a letter and a document rather than a lawsuit. In all four, the outcome was set by paperwork that did or did not exist before anyone left.

A closing observation about how these matters actually resolve. Very few of them end in a judgment. They end in a letter that is professional rather than threatening, a confirmatory assignment obtained for a modest payment, a separation agreement that transfers credentials, or a nonsolicitation reminder that a departed employee simply honors. The practitioner's contribution is usually not litigation strategy; it is having ensured, years earlier, that the documents exist which make the letter effective — and, at the moment of departure, preserving the evidence that would otherwise be gone by the time anyone thought to look for it.

A Suggested Reading Path

If you have a specific problem right now, branch:

Someone is leaving for a competitor. Where an Employee Can Go → Trade Secret Protection and Departure Checklist.
You are hiring from a competitor. Trade Secrets and the DTSA → Building a Trade Secret Program That Survives Litigation.
Ownership of work is unclear. Who Owns the Work → Copyright Ownership and Chain of Title Checklist → Transfers, Licenses, and Termination Rights.
A founder dispute over the brand. Whose Brand Is It? → Resolving a Founder or Partnership Brand Dispute.
Software or design created by contractors. Software, Data, and Open Source Toolkit → Layered Design Protection Toolkit.

If you are building the program from nothing, read in this order:

Who Owns the Work — the assignment paperwork.
Trade Secrets and the DTSA — what the program protects.
Building a Trade Secret Program That Survives Litigation — reasonable measures.
Where an Employee Can Go — the covenants and their limits.
Trade Secret Protection and Departure Checklist — the exit procedure.
Whose Brand Is It? — the founder layer.

Primary Authorities

| Authority | Rule, in one line | |---|---| | 18 U.S.C. § 1836 | DTSA civil action; injunctions, damages, exemplary damages, fees, and seizure. | | 18 U.S.C. § 1839 | Trade secret definition; reasonable measures and independent economic value. | | 18 U.S.C. § 1833(b) | Whistleblower immunity notice; omission forfeits exemplary damages and fees. | | 18 U.S.C. § 1832 | Criminal theft of trade secrets. | | 17 U.S.C. § 101 | Work-made-for-hire categories; why software and design contractors need assignments. | | 17 U.S.C. § 201(b) | Employer as author for works within the scope of employment. | | 17 U.S.C. § 204(a) | Transfers require a signed writing. | | 17 U.S.C. § 203 | Termination of transfers by individual authors. | | 35 U.S.C. § 261 | Patents as personal property; assignment in writing. | | 35 U.S.C. § 116 | Joint inventors. | | 35 U.S.C. § 262 | Joint owners may exploit without accounting. | | 15 U.S.C. § 1055 | Related-company use; control determines trademark ownership. | | 15 U.S.C. § 1127 | Definitions; the source-identification function behind ownership. | | 15 U.S.C. § 1125(a) | False designation; the claim where a departed founder uses the mark. | | 15 U.S.C. § 1 | Restraints of trade; the antitrust limit on no-poach arrangements. | | 18 U.S.C. § 1030 | Computer access; the claim sometimes pleaded alongside misappropriation. |

Forms and Templates

Three documents prevent nearly everything in this toolkit, and all three are short.

The employment agreement package: a present-tense invention assignment covering all intellectual property created in the course of employment, a disclosure obligation, a prior inventions schedule the employee completes and signs at hire, a confidentiality obligation with the 18 U.S.C. § 1833(b) immunity notice, a cooperation clause for prosecution and enforcement, the statutory carve-outs required in the relevant states, and covenants drafted to the narrowest scope that protects a real interest.

The contractor agreement: the same assignment, in present tense, signed by the individual doing the work — not merely by an agency. Where an agency is interposed, obtain assignments from the individuals or confirm the agency holds and can convey them.

The founders' agreement: IP assignment from each founder, express company ownership of the brand and all accounts, a rule that no company account may be registered to an individual, and a departure provision covering credentials, transition, and releases.

License Agreement Template is the instrument for the occasional case where a departing founder or contractor legitimately retains rights and the company needs continuing use — a narrow, bounded license is far better than an unresolved ambiguity, and it can be paired with a purchase option. Assignment Agreement Template is the confirmatory instrument for cleaning up a gap discovered years later; obtain it early, because cooperation declines sharply once a transaction or a dispute is in view.

Related Toolkits and Checklists

Trade Secret Protection Toolkit is the deep treatment of the program and the litigation. Software, Data, and Open Source Toolkit covers the contractor-assignment problem as it appears in codebases.

Startup and Founder Brand Toolkit covers the year-one decisions that prevent founder disputes. IP Due Diligence Toolkit is where missing assignments surface, usually at the worst moment.

Layered Design Protection Toolkit covers the design-contractor gap. Trademark Dispute Resolution Toolkit covers the separation negotiation in a founder dispute. The Brand Owner's Master Toolkit indexes the shelf.