It is common for employers to use non-competition agreements. These documents’ goal is to keep company information and trade secrets from falling into competitors’ hands as well as to protect the business’s reputation. However, these sometimes are at odds with a former employee’s right to work or earn a wage. This leads to disputes.
Not all agreements are enforceable
Any poorly drafted contract can be useless, and non-competes are no different. The best way to strengthen the contract is to focus on valid business interests. These include:
- Trade secrets involving products, services and practices
- Other valuable information not considered a trade secret
- A lucrative relationship between an existing customer and the employee fostered by the employer
- Any specialized training the employee receives
The agreement must be reasonable
A reasonable or realistic agreement has a better chance of holding up in court. The employer should be careful about the duration, scope and territory involved. Broad examples of unreasonable would be a period longer than a few years, or a similar position within the same industry. Overly broad geographic restrictions also weaken the covenant. Each business is different, with some more specialized than others, so each case is different.
Information can age
Companies often change how they conduct business, either adapting to innovations or other changes in the industry. Laws are drafted and amended as well, so it is best not to look too far ahead with these contracts. Those with questions or concerns can work with an attorney to draft the strongest possible agreement.