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Why Do I Need a Non-Compete Agreement?

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 relations.

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.