One of the most important tools available to your business is a contract. A contract is a formal, legally binding agreement that outlines terms between your company and another party, such as an employee or supplier, that establishes the rights and responsibilities of each party over the course of the relationship. The terms of this type of agreement are important as this could shield your company from complications, financial loss and other issues.
A practical way you can leverage the benefits of a contract is in the relationship between your company and employees. One of the terms you may find helpful is a non-compete agreement, a clause that will protect your business and establish expectations for those who worked for your Georgia company. By including this clause in your employment contracts or having your employees sign this type of agreement, you are shielding the interests of your business for years to come.
What is it, and how does it work?
A non-compete agreement is a legally binding contract that prohibits employees from releasing important information owned by your company to a new employer. The terms of your non-compete clause depend on the details of your specific company and its goals, but any type of non-compete prevents a former employee from working with a competing company for a limited amount of time. Consider the following facts about these agreements:
- One of the benefits of a non-compete is that it prevents the transfer of proprietary information to a competing business.
- A non-compete agreement prevents an employee from working for a competitor for a specific amount of time after leaving your business.
- This type of agreement can prevent an employee from working for a competitor, within a certain market or within a specific location, for a limited period of time.
In order for a non-compete agreement to be enforceable, it must be reasonable in scope, duration and geography. These agreements are particularly beneficial in cases where an employee has access to sensitive or proprietary information that is important for a company’s competitive advantage.
Creating a non-compete
Your employment contracts should be tailored to the needs and function of your company. If you are considering including a non-compete contract for your employees, you may benefit from an explanation of how to create a contract that will provide protection for your company and reasonable expectations for your employees.