| 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.
All employers should give careful thought to protecting their businesses by requiring key employees to sign carefully prepared noncompete, confidentiality, and/or nonsolicitation 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."
State laws applicable to the enforcement of noncompete agreements vary considerably, but the common theme is that they are restraints on competition and can interfere with an individual's ability to earn a livelihood. For this reason, unlike most other contracts, they will not be automatically enforced as written, but will be very carefully scrutinized.
Enforcement of noncompete
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
The attorneys of Harris Dowell Fisher & Harris, L.C. are experienced in
all aspects of the law of noncompete 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. Related
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