Here are some tips on how to use non-compete agreements. Many employers are considering the benefits associated with a non-compete agreement. This is because too many valuable employees and trade secrets have been lost to competitors in the last couple of decades, especially in the tech industries. A non-compete agreement can be a valuable tool for many types of businesses in Arizona.
Reasons to Consider Using a Non-Compete Agreement
By asking your Arizona employee to sign a non-compete agreement, also referred to as a covenant not to compete, this means that the employee promises not to work in a way that competes with your business for a certain period of time after he or she leaves the company. If your employee does ultimately leave the company either under his/her own choice or through a layoff or termination, this gives you some peace of mind about what to expect in the future.
A non-compete agreement can be extremely beneficial for protecting your business. It can protect the confidential information that your company has worked so hard to create and shield. If one of your employees has access to trade secrets or confidential business information, you will of course want to prevent this employee from opportunities to disclose these details to competitors.
What Can’t Be in a Non-Compete Agreement?
Although non-compete agreements can be very critical for protecting your trade secrets of your business, there are rules and guidelines in the legal system that place a high value on an individual’s right to earn a living. If your non-compete agreement is unreasonable, then it may be ruled invalid. You need to have a good business reason, provide a benefit to the employee and have reasonable stipulations regarding the length of time and geographic range of the agreement. For example, a non-compete agreement can’t cover too broad of a geographic area, prohibit a former employee from engaging in a large number of business types, or last too long.
When crafted appropriately, however, a non-compete agreement can be critical for clarifying the guidelines and expectations as well as protecting your existing information and business relationships. A non-compete agreement can be a valuable part of the tools that you use to protect your company, but it should only be drafted by an Arizona business attorney so that the proper verbiage is used to protect you and your company. In order for a non-compete agreement to mean anything, it needs to be valid and clearly written.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding How to Use Non-Compete Agreements, or any other litigation matter, please feel free to contact us at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.