Here are some tips for drafting a solid non-compete agreement. As an employer, a non-compete may be one of the most important tools that you use. Read on to discover the following tips about how to put together and execute a non-compete agreement for your employees.
Get a Signature Immediately
It is important that your employees sign the non-compete agreement as soon as he or she starts working with you. If the non-compete agreement is not signed at this time, then the employer could be facing various challenges. Do not wait to get a signature from any employee so that you can feel confident about protecting your business in the future.
Make the Document Understandable
The language in the non-compete agreement should be clear and understood by any employee who works with your company given their education and background. Keep things short and simple where possible. Using the ‘less is more’ approach can be very valuable. The employer should always have a reasonable non-compete agreement or non-solicitation agreement. If the agreement is not seen as reasonable, then the court will be unlikely to enforce it.
When you have a new employee sign such an agreement, perhaps do so in person with your human resources representative. This gives the employee chances to ask questions and a witness to the valid signing of the agreement.
Verify That the Employee Understands the Restrictions
It is imperative that the employee be aware that your Arizona non-compete agreement outlasts the termination of the relationship between employer and employee. If this is not spelled out clearly in the agreement, the restrictive covenant about the expiration of the relationship between the employee and employer could be invalidated.
Make sure that your document has been reviewed by an Arizona business attorney to prevent any potential challenges. It is important that the document be legally valid, but both parties should also understand the rights and responsibilities listed in a non-compete agreement.
Include Necessary Provisions
The employer may wish to have a provision that the employee is responsible for attorney fees and costs in the event that the employer has to enforce the non-compete agreement. Otherwise the employer may find themselves paying all of the cost associated with litigation or other legal concerns to enforce a non-compete agreement. This is just one clause that can clarify how you intend to handle issues and also may prevent an employee from breaking the agreement in the future as a result of his or her concern about additional responsibilities for legal fees.
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 Tips for Drafting a Solid Non-Compete Agreement, or any other commercial litigation matters, please feel free to contact Joel E. Sannes at 480.461.5307, or 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.