Non-Compete Agreement

What is a Non-Compete Agreement?

A non-compete agreement is a legal contract wherein one party agrees not to enter into or start a similar profession or trade in competition against another party.

Often used between employers and employees, these agreements are designed to protect a business's proprietary information or trade secrets by restricting former employees from using that knowledge in competing ventures for a specified period and within a certain geographic

What are the benefits of creating a Non-Compete Agreement?

1. Protection of Business Interests: For businesses, non-compete agreements can protect sensitive information such as trade secrets, confidential information, and customer/client lists, by preventing employees from taking this information to a competitor or starting their own competing business.
2. Retention of Clients: By restricting former employees from soliciting the company's clients, a non-compete agreement can help the business maintain its customer base.
3. Investment Protection: Businesses often invest significant resources in employee training. Non-compete agreements can help protect this investment by discouraging employees from leaving to work for a competitor.
4. Incentives for Employees: From the employee's perspective, a non-compete agreement might be an indicator of a valuable employment opportunity, as it suggests the company considers their role as significant and having potential access to crucial business information.

However, non-compete agreements must be reasonable in scope and duration to be enforceable. If they are too broad or too restrictive, a court may deem them as restricting an individual's right to earn a living. Therefore, businesses must be careful to balance their need for protection with the individual's rights.