If you are worried about your employees leaving and joining your biggest competitor, you can use a non-compete clause to safeguard your business. A non-compete provision can protect your company by preventing employees from quitting and joining one of your biggest rivals. Find out everything you need to know to understand when and how to incorporate a non-compete clause in your employee agreement. A non-compete provision is a valuable instrument that you can employ to help protect your company.
This kind of provision is implemented with new hires to make sure they will not quit their jobs and start their own business or work for your competitors right away. Additionally, it stops the employees from competing with you when they are employed by you. Employees are a company’s asset. When you acquire other assets for your firms like machinery or equipment, do you not do your best to find the best deal equipment and try to make sure that it works for a long time? Why not do the same with your employees as a non-compete clause will discourage them from leaving your company to go work for your direct competitors.
The Enforceability of Non-Compete Provisions
Adding a non-compete clause to your employee agreement can be quite beneficial for your company. By doing this, you can effectively prevent your employees from using the skills and contacts they acquired while working for you to help a rival company or launch a rival organization. The issue with non-compete clauses is that they can seriously restrict an employee’s ability to provide for himself. Because of such an arrangement, it may be nearly impossible for the worker to get employment in any other enterprise. Owing to this, non-compete agreements are totally outlawed in some states including California, North Dakota, and Oklahoma.
They are also hard to enforce in some places. To find out what may be applicable for you and your company, research the laws in your particular jurisdiction. Generally speaking, the more precise and limited the agreement is, the better chance it will have of being supported in court if it is ever challenged. A judge may be more inclined to uphold the agreement when it is challenged if it specifically names competitors and specifies a small time period during which it is applicable.
Setting Up an Employee Non-Compete Clause
You have the option of mandating that your employees either sign a separate non-compete provision or have one as a part of the wider employment agreement you provide to your staff. The non-compete agreement must state the particular field or industry that an employee is restricted from operating in, whether the agreement is region-specific, and the length of the employee’s ban from working in that domain or industry. You can draft a non-compete agreement for your business either on your own or in collaboration with a lawyer. A non-compete agreement might be able to assist you in safeguarding your firm from former employees or contract workers who would otherwise work for your biggest rivals and use vital information about your organization and clientele for their own gain.