Many employers require new employees to sign non-compete agreements before
they begin working. These agreements are typically enforced after the
employee no longer works for the company. Employers have numerous reasons
for requiring non-compete agreements, such as protecting trade secrets
and the goodwill of their enterprise. In this blog, we explain why you
need to have
non-compete agreements in place to protect your business interests.
What Does a Non-Compete Agreement Do?
Non-competes prevent employees from using the skills and knowledge they
acquired from your workplace for a specified period of time after their
employment has ended. Employers often add non-compete clauses into their
employee contracts. However, these clauses are controversial and aren’t
always enforceable in some places.
Why Are Non-Compete Agreements Important?
Non-compete clauses protect your business from having its operational methods
and strategies for success stolen by your competitors. Without a non-compete
clause for your employees, you might end up seeing certain techniques
and confidential information being used by other businesses or recruiters.
If you want to keep your competitive edge in the marketplace, you will
need to do all that you can to protect confidential information, sensitive
business information, and trade secrets. Non-competes can also be used
to preserve the goodwill developed by an employer through their customer
When Should I Use a Non-Compete Agreement?
If your business is in a highly competitive field, or if you are concerned
about employees leaving with specialized knowledge they can’t gain
elsewhere, you should consider using non-compete agreements. If you are
starting a brand new business, a non-compete will prevent your employees
for starting a business to compete against you.
The following are situations where having a non-compete agreement will
be advantageous for your business:
- Hiring new employees or personnel
- Ending relationships between your business and employees
- Ending business relationships with outside consultants
- Ending the relationship with another business partners
Many business owners assume non-compete clauses are universally enforceable.
However, some states or cities have laws in place that make non-compete
clauses unenforceable, so you should consult with an experienced business
attorney to find out if these agreements are applicable to your business.
At the Dean Law Firm, we are committed to helping local businesses up hold
their legal rights. From a breach of contract disputes to trademark infringement
cases, we have the skills that you need to protect your financial interests.
Our lawyers can help you make informed decisions about your business operations.
Contact our Midland team of business litigation lawyers
to schedule your free consultation today.