A non-compete agreement is a legal document that many employers require their employees to sign. This agreement prevents employees from working with competitors or starting a competing business for a specific period of time after leaving their current employer. The purpose of a non-compete agreement is to protect the employer`s business interests and trade secrets. In this article, we will discuss the basic components of a non-compete agreement.
1. The parties involved: The non-compete agreement should clearly mention the parties involved, i.e., the employer and the employee. It should also identify the company`s subsidiaries, affiliates, and other entities that the agreement covers.
2. The scope of the agreement: The agreement should state the exact nature of the work that the employee is prohibited from performing during the restricted period. For example, if you work for a software company as a programmer, the non-compete agreement might restrict you from working for another software company as a programmer for a specific period after leaving the current employer.
3. The time period: It is essential to specify the duration of the non-compete agreement. The period can vary depending on the industry, but typically it ranges from six months to two years. Any longer period might not be enforceable in some states.
4. Geographic location: The non-compete agreement should state the geographical location of the restriction. It can be a city, state, or country, depending on the nature of the business. Employers can also include language prohibiting employees from working remotely for competitors, depending on the job and industry.
5. Consideration: A non-compete agreement is a contract, and like any other contract, it needs to have consideration. Consideration can be anything of value that the employee receives in exchange for signing the non-compete agreement. This can be a job offer, a promotion, a bonus, or any other form of compensation.
6. Severability: The non-compete agreement should have a severability clause. This clause states that if any part of the agreement is found to be unenforceable, the other provisions will remain in effect.
7. Confidentiality: Many non-compete agreements include a confidentiality clause that prohibits the employee from disclosing confidential information about the company`s operations, trade secrets, customer lists, etc.
In conclusion, a non-compete agreement is a valuable tool for employers to protect their business interests. It is important to ensure that the agreement is reasonable and does not unduly restrict the employee`s ability to earn a living. An experienced attorney can help draft a non-compete agreement that is fair and enforceable.