Many employers require key employees to sign noncompete agreements.
When employment terminates, such employees often find that their best employment opportunities would involve working for competitors in violation of such agreements.
Key employees’ value in the job market — and ability to damage the initial employer’s business — may be greatly enhanced because of their customer contacts and/or knowledge of confidential business information and trade secrets.
The risk of damage is heightened by the ease of transmission of business information afforded by modern electronic data devices, ranging from email to scanners and cell phone cameras.
The Means of Protection
All employers should give careful thought to protecting their businesses by requiring key employees to sign carefully prepared non-compete, confidentiality, and/or non-solicitation agreements.
It is essential to draft such agreements carefully, with knowledge of applicable state law and the particular employer’s circumstances.
Important confidential information should be treated so as to maximize the likelihood it will meet the legal definition of “trade secret.”
Enforcement of Non-Compete Agreements
State laws applicable to the enforcement of non-compete agreements vary considerably, but the common theme is that such agreements are restraints on competition and can interfere with an individual’s ability to earn a livelihood. For this reason, unlike most other contracts, courts will not automatically enforce them as written, but will scrutinize them very carefully.
Enforcement of non-compete agreements may depend on factors such as:
- The extent of the employee’s customer contacts and/or knowledge of trade secrets
- The geographic scope and duration of the prohibition
- The nature and degree of competition between the original employer and the new employer
How We Can Help
The attorneys of Harris Dowell Fisher & Harris, L.C., are experienced in all aspects of the law of non-compete agreements, including drafting such agreements, obtaining temporary restraining orders and injunctions to enforce them, and evaluating the enforceability of agreements to which applicants for employment are signatory.
Contact us to discuss how we may best assist you in this regard.