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Is a non-compete agreement binding?

On Behalf of | Jun 1, 2020 | Business Law |

Employers often use non-competition agreements. These documents are usually signed as part of the usual orientation process but can be signed at other times. The employer’s goal is to keep company information and trade secrets from competitors, but also to maintain the company’s reputation. These will often conflict with an employee’s right to earn a wage or work, which leads to disputes.

Good practices for enforceable non-competes

Courts will often side with the employee in non-compete disputes, so it is essential to focus on valid business interests. Typical examples include:

  • Trade secrets regarding the product or company practices
  • Valuable business information that is not an official trade secret
  • All specialized training of the employee
  • The relationship between the employee and the client

Let’s be reasonable

It is best if the agreement is reasonable in regards to duration, scope and territory. The nature and products of each company are different, with some more specialized or niche than others, so reasonable is open to interpretation with some companies better able to enforce their agreements. It is best to keep the window for enforcement of the agreements modest in length. An overly broad geographic territory will also weaken the contract.

The needs of each business may change

Changes in the way we do business are common. This is due to technology and advances in various fields. As new lawmakers draft new laws and amend old ones, it is best to review these agreements every few years to ensure that they are still valid. Those with questions about a non-compete dispute can talk to an attorney with experience with business law litigation. They can review the agreement to see if the contract applies to the issue in dispute.