An Employee Non-Compete Agreement is signed by new employees. If the employee later leaves the company, this agreement may prevent him or her from competing against the company, recruiting other employees, or misusing confidential information.
WHAT
The Non-Competition Agreement prevents former employees from competing with the company, recruiting other employees, or misusing confidential information.
WHY
The agreement provides the employer with protection in three key areas:
- It prohibits a former employee from working with a competitor.
- It prohibits a former employee from soliciting former coworkers to be employed in his or her new company.
- It prohibits a former employee from disclosing confidential information learned in the course of their employment.
CRITICAL INFORMATION
Courts generally do not favor agreements that prevent people from working. Courts appreciate the need for non-compete agreements, but they will not tolerate agreements with unreasonable restrictions. Consider carefully- the fact that an employee signed the agreement does not guarantee that the court will enforce it.
Courts understand that there is a substantial investment in hiring, training, and paying employees, and that employers need to protect their interests. The court will enforce a reasonable non-competition agreement, provided:
- - - The employer has a legitimate need for the agreement.
- - - The geographic area covered is not too broad.
- - - The duration of the agreement is not too long.
Like all other contracts, to be enforceable this agreement must be supported by consideration. Usually, this requirement is satisfied if the Employee Non-Compete Agreement is completed at the start of employment. If the employee is asked to sign the non-competition agreement after employment has started, a court may find the agreement unenforceable for lack of consideration. There is a trend in some states to enforce a non-compete promise only if the employee made that promise in the context of a larger agreement.
No comments:
Post a Comment