Business Law

U.S. Business Law

Firmengründung

Contract Law

Non-Compete Agreements
Non-Disclosure Agreements
Employee Handbook

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Non-Compete Agreements

 

Non-Compete Agreements

What is a non-compete agreement?

A non-compete agreement is an agreement that is signed by an employee which prohibits them from working in your line of work for a specified amount of time. This agreement essentially prevents the use of confidential information by their competition.

Non-compete agreements can also be used if an employer provides job specific training and wishes to protect such an investment.

Non-compete agreements can be included in your terms and conditions and do not need to be made in conjunction with an employment agreement. These agreements do not apply to your company as a whole, but specifically to areas that you want protected, which is typically confidential company information, such as customer lists, blueprints, marketing tactics, future plans etc.

When do non-compete agreements need to be signed?

Such agreements are typically signed prior to the start of employment with a particular company, however, some states allow non-compete agreements to be signed after a person is already employed.

Do non-compete agreements hold up in court?

As long as the scope of the agreement is not too broad, then it is likely that such an agreement will hold up in court. Some courts will also rewrite such agreements to reduce the scope, so that only necessary information is protected against. The scope of a non-compete agreement must be reasonable, and should therefore only protect against information that would cause a company distress if distributed. However, some states, such as California do not recognize non-compete agreements at all.

Who should sign a non-compete agreement?

Any employee who has access to sensitive information that is in the best interest of the company to be withheld. Employees, such as janitors and other staff who are not exposed to sensitive information should not be required to sign a non-compete agreement.

 


 

 
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