“The Why and How of a Non-Compete,” Employee Relations Law Journal
In an article published in the Winter issue of Employee Relations Law Journal, Richard Morgan discusses the questions a company should ask itself if it decides that it wishes to protect its business and operations from the competition when an employee leaves.
Designed to prevent employees from entering into markets or businesses considered to be in direct competition with their previous employer, non-compete agreements are valuable tools to protect against former employees revealing sensitive, confidential, proprietary or secret information about the company. However, employers using these agreements must be mindful that restrictive post-employment covenants, such as non-competition agreements, are strongly disfavored.
Morgan outlines a series of questions that employers should consider when creating policies to protect their business and operations from the competition in the event that an employee leaves.
“The bottom line has several key components – know the law(s) of the states where you do business; define what you are trying to protect; be (business smart) reasonable and realistic about the time you need the protection; be certain you have paid something (consideration) for the non-compete; and remember that no one size fits all situations,” explains Morgan. “You have something valuable to protect – do not lose that protection by not taking care of these key basic factors.”