It’s standard for employers or businesses to require employees and executives to sign non-compete agreements. These agreements’ goal is to protect the business by restricting competitors from accessing proprietary information and trade secrets. However, these contracts can sometimes be at odds with the former employee’s right to earn a living.
A contract may not be enforceable
A poorly drafted agreement likely will not hold up in court and therefore is useless. This principle applies to non-competes as well. The best way to create a binding contract is to focus on valid business issues. These often include:
- A profitable relationship between the company and a crucial existing customer
- Trade secrets involving practices, services and products
- Special training provided to the employee
- Other proprietary information that is not a trade secret
Reasonable agreements are the strongest
A realistic agreement generally affords the best opportunity for standing up in court. The client and attorney need to carefully consider reasonable goals regarding the agreement’s duration, scope, and territory involved. This will vary on the specifics of the business and employee’s skill set, but employers should not expect the duration to last more than a few years. Geographic concerns may depend on the amount of territory covered by the business, but overly broad ones will likely not hold up.
Change is constant
Companies may be concerned about secrets leaving the company, but it is essential to remember that innovation and adapting to change are hallmarks of successful businesses. A former employee’s information may no longer be unique or even applicable. Laws are drafted and amended, so it is best not to look too far ahead anyway.
Employees with questions about whether a non-compete they signed is still binding can speak with a knowledgeable employment law attorney. These legal professionals can litigate non-compete agreements if the contract is no longer applicable.