As a business owner, you should prioritize protecting your intellectual property, trade secrets and client relationships. And one effective legal tool that can help you safeguard your business interests is a covenant not to compete.
A non-compete agreement is a legally binding covenant between an employer and an employee or between businesses whose primary purpose is to restrict the employee or party involved from engaging in competitive activities that may harm the employer or the business.
What are the key elements of a non-compete agreement?
For you to craft a robust non-compete agreement, there are key elements that you should consider. For starters, the agreement should clearly define the scope of the restrictions. This includes specifying the geographical area, the duration of the non-compete and the restricted activities or industries.
The agreement should also outline the specific protectable interests of the employer or business. These may include trade secrets, client lists, specialized knowledge or goodwill. You should also know that courts assess the reasonableness of a non-compete agreement. As such, it should not overly burden the employee or party bound by it and should be fair in its restrictions.
How do non-compete agreements benefit your business?
Non-compete agreements can safeguard your company’s valuable intellectual property by helping prevent employees from using your proprietary information to benefit a competitor. The agreements achieve this by prohibiting employees from soliciting or doing business with your clients after leaving your company. Non-compete agreements can help you retain your valuable client relationships.
Additionally, non-compete agreements can give your business a competitive edge by helping ensure that your employees do not immediately join a rival company or start a competing venture.
A well-crafted non-compete agreement can be a powerful tool to safeguard your intellectual property, client relationships and competitive edge. To help ensure you have valid non-compete agreements, consult seasoned professionals who will help craft and update them.
