An employee agreement not to compete, also known as a non-compete agreement, is a common practice in many industries. These agreements are designed to protect a company`s interests by preventing a former employee from working for a competing business or starting a competing business for a specific period of time.
Non-compete agreements are typically included in employment contracts, and they are intended to prevent employees from sharing sensitive company information or using that information to benefit a competing business. These agreements may also include provisions that prevent employees from contacting and soliciting the company`s clients for a specified period.
It`s important to note that non-compete agreements are not legal in all states. Some states, such as California and North Dakota, have laws that make these agreements unenforceable.
In states where non-compete agreements are legal, however, they are a valuable tool for protecting a company`s interests. Here are a few key points to keep in mind when considering implementing a non-compete agreement:
1. Be reasonable. Courts are more likely to enforce non-compete agreements that are reasonable in scope and duration. If your agreement is too broad or lasts for too long, it may be deemed unenforceable.
2. Consider the employee`s role. Non-compete agreements are more likely to be enforced for employees who have access to sensitive information or who play a key role in the company`s success.
3. Include a severability clause. This clause ensures that if one part of the agreement is deemed unenforceable, the rest of the agreement will still hold up in court.
4. Offer consideration. In order for a non-compete agreement to be enforceable, the employee must receive some form of consideration in exchange for signing the agreement. This could be in the form of additional pay, a promotion, or other benefits.
Ultimately, a non-compete agreement can be an effective way to protect your company`s interests and ensure that your employees are not using sensitive information to benefit your competitors. However, it`s important to work with an experienced attorney to ensure that your agreement is legally enforceable and fair to all parties involved.