Traditionally speaking, non-compete agreements (NCA) have been used by different employers as a way to keep employees who are privy to trade secrets and other strategic operational insight from being easily taken and used against their employer. As a result, any number of industries from sales to software development have taken to protecting their intellectual property by requiring their employees to sign these type agreements.
Despite their increased use, many noncompete clauses are not written in a way where they’re enforceable in the state in which they are drafted. In other cases, the execution of these agreements is not seen as being in alignment a corporation’s policies, procedures or in the public’s best interest.
A NCA is intended to ensure that the unique training, contacts or insight that their previous employer has equipped a former employee with is not used for competitive advantage purposes against their former employer. Despite this, a NCA that is too broadly written may be seen as inhibiting a former employee from obtaining gainful employment.
Because of this, NCAs must be seen as being reasonable in scope. The line of business it covers, the time frame and geographic area it covers must all be seen as being within reason. It’s also important to account for how the disclosure or use of the proprietary information jeopardizes a company’s legitimate business interests as this will have to be proven if you decide to wage a case that the NCA was violated in court.
In having an employee sign a NCA, it’s important that the employer must offer something of value in exchange in kind for the employee signing such an agreement for it to be considered valid. This can come in the form of a either ownership stake or specialized training.
If you’re either looking to have a NCA crafted for your business or have one in place that you wish to enforce, a Melbourne, Florida, noncompete litigation attorney can help in your legal matter.
Source: ipwatchdog.com, “How to write enforceable non-compete agreements,” Derek Handova, accessed April 25, 2017
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