Non-Competes and Non-Disclosures
In an ideal world, your best, most valuable employees would never have reason to stop working for you and there would never be the need for something like a non-compete agreement. Of course, the realities of the business world are much different, with members of today’s workforce being more mobile and less likely to stay at any one company for very long.
As a result, non-compete agreements and other types of restrictive covenants have become increasingly common. These tools are indispensable for employers who want to prevent the competition from gaining an unfair advantage.
When drafted correctly, a non-disclosure (or confidentiality) agreement can be used by a company to prohibit past or present employees from disclosing the employer’s sensitive information.
Unfortunately, it is also very easy and common for employers to make mistakes that make these contracts unenforceable.
At Benckendorf & Benckendorf, P.C., our lawyers draft legally sound, enforceable non-compete agreements for business clients throughout central Illinois. To learn more about how our attorneys can help protect your interests as an employer, call any of our office locations or contact us online to set up an appointment.
A Sampling of the Issues
Because non-complete agreements generally are disfavored by courts, there are several issues to be aware of with regard to them.
First, non-compete agreements are not appropriate for every employee. If you do not have a legitimate business interest at stake (e.g., protecting trade secrets, customer goodwill, or employee relationships), the agreement may not withstand a legal challenge.
Overreaching also can be problematic. Employers often try to restrict too much with their employee agreements. In these cases, courts almost always side with the employee and invalidate the agreement in its entirety. For this reason, it is important to only restrict those activities that affect your legitimate business interests.
Another type of problem arises when employers want to have an existing employee sign a non-compete. Generally speaking, if you ask someone who is already working for you to sign such an agreement, you also should consider offering that employee some type of compensation in exchange.
Finally, be consistent in enforcing these agreements. If you allow some employees to violate the terms without challenge, you will be less likely to find sympathy or a favorable court ruling later.