You spent a lot of time and resources hiring the right people, training them in their position and coaching them through the rough spots. When they leave, you don’t want your competitors to gain all of the benefits of your investment. Even more, you don’t want those employees to take what they’ve gained and turn into your competitors.
Noncompete and nondisclosure agreements are two different ways you can protect your business. Noncompete agreements generally prohibit a former employee from working with your competitors or going into business against you, while nondisclosure agreements are generally used to protect your intellectual property and business secrets.
However, agreements of these kinds have to be valid to be of any value to you. A noncompete agreement that is found to be overly broad and which effectively prevents a former employee from making a living in their trade no matter how far away from your business might be thrown out. A nondisclosure that lasts too long or is drafted with vague wording might not hold up in court.
To make an effective restrictive covenant with your employee, it’s important to consider things like the kind of restrictions that best serve your business and what you plan to offer the employee in exchange for the agreement. You also must consider things like the necessary duration of an agreement and its geographical limits.
When crafting a restrictive covenant, It often helps to have a clear idea of what the court may consider “reasonable” (and what it might not). An experienced attorney can help you make agreements that are effective and legally sound.
