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Know how to avoid a void non-compete agreement

| Oct 15, 2020 | Employment Law |

Recruiting and retaining top talent is a struggle that many businesses face at one point or another. This can limit your business’s potential, thereby affecting your clients and your profitability. Fortunately, there are some things you can do to better position your business with the talent and protection it needs.

How employment contracts can help your business

An employment contract is a great way to secure talent while at the same time setting expectations and protecting your interests. While your employment contracts will want to address major issues like compensation, duration, and benefits, there are other matters that can be incorporated into a contract that are just as important, if not more so. One of those is the non-compete agreement.

Know the limitations of a non-compete

Although a non-compete agreement can be extremely beneficial for your business, far too many businesses make them too restrictive, which may render them unenforceable. Therefore, when drafting your non-compete agreement you need to consider four major factors.

  1. The business interest protected: You need to make sure you can articulate a specific business interest that is being protected, meaning you can’t be over-broad. A restriction that prevents a former employee from disclosing trade secrets is an example of a legitimate business interest that needs protection.
  2. The hardship on worker: Your agreement can’t be too restrictive on an employee, thereby creating an undue hardship. Again, being specific and avoiding broad language can help here.
  3. Harm to the public: The public can’t be harmed in anyway by your agreement, so don’t overlook this aspect.
  4. Time period and scope: Again, the restrictions placed need to be reasonable. This means that you should be able to justify why you’re restricting an employee’s actions within the geographic region and the identified period of time.

An employment contract can make a huge difference in your business operations. But you shouldn’t risk being subjected to a void agreement due to legalities. That’s why it might be in your best interests to discuss your situation with an experienced business law attorney.