Does your business have a valid non-compete agreement?

Does your business have a valid non-compete agreement?

Employees are a key to a successful business. No matter how good the product, the inability to do something with the product eliminates the value of a product. The perfect example is found in the movie industry. If you interested in watching a suspense movie, would you choose a movie with Mike Myers or Denzel Washington?

In most instances, a valuable employee has access to the things that the owners consider to be the keys to the success of the company, be it intellectual property or trade practices. How does an employer best utilize is valuable employees and protect its secrets that the valuable employees need to know to be most valuable?

The most common means of protection is a non-compete agreement. However, non-compete agreements contain an inherent conflict that cause courts to be cautious in granting an employer against a former employee. While the employer will see that it is merely enforcing its rights given under a contract, a court is looking at possibly depriving an individual and his/her family of a livelihood. The result is that the statutes and case law regarding the enforcement of a non-compete is both confusing and hard to enforce.

Non-compete agreements have their place and should not be ignored.  To make a non-compete agreement more likely to be enforced, link the agreement to the disclosure of information and documents that truly contain trade secrets, courts are more likely to understand an employer’s attempts to protect its intellectual property rights.  Additionally, consider adding a provision restricting the right of an employee to disclose trade secrets belonging to the employer.  Again, the confidentiality provision must be carefully drafted.  However, a proper confidentiality provision is likelihood to be enforceable for a longer period permitted with non-compete agreement.

If you have legitimate concerns about prospective competition from former employees and detrimental disclosure of trade secrets, contact an attorney to determine what protection best serves your interests.

2018-08-02T11:57:39-05:00February 18th, 2017|Business Law, Employment Law|
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