Make Your Noncompete Agreements Enforceable
Training employees costs time and money. No company wants to train an employee only to have him or her snatched by the competition. Noncompete agreements were created for this reason. Unfortunately, they're hard to enforce. Several states have made them illegal, and most states that do recognize them limit them to under a year and a geographic range. Here are some tips making your noncompete agreement hold up in court.
1) Make sure to compensate the employee. If the agreement is part of the employment contract, employment is considered to be sufficient. If the agreement is signed later on, promise the employee a promotion or a raise
2) Define the terms as narrowly as possible. Be specific in naming the company's protectable interests, i.e., equipment, information, technology, strategy, sales prospects, etc. A court will be more likely to accept the agreement if it can see why your company needs to be protected.
3) Include a clause that states that if the court finds any restriction too broad, the rest of the document is still valid.
4) Consult your attorney before asking an employee to sign a noncompete agreement to make sure that the agreement follows state laws.
Comments
If looking to truly have an enforceable document, make sure you consult an attorney. Each state has different laws on "blue penciling" of non-compete, and the scope of the restriction must be reasonable for both geography and type of activity sought to be protected. You can't keep someone from earning a living... as important is the confidentiality of customer lists, trade secrets, etc. You don't want an employee taking the intellectual property and going into business on equal footing, even if you can't keep them from competing.