When it comes to signing a non-compete agreement, one of the most important aspects to consider are the clauses included in the contract. Non-compete clauses are designed to protect employers` interests by restricting an employee`s ability to work for a competitor after leaving the company. However, not all non-compete clauses are created equal, and some may be more restrictive than others.
Here are some of the clauses you should look out for when reviewing a non-compete agreement:
1. Geographic Scope
One of the primary factors that can influence the enforceability of a non-compete agreement is the geographic scope. This clause specifies the geographic region in which the employee is prohibited from working for competitors. The broader the geographic scope, the more restrictive the agreement will be. Therefore, it is important to ensure that the geographic scope is reasonable and necessary to protect the employer`s legitimate interests.
2. Duration
Another key clause to consider is the duration of the non-compete agreement. Generally, the longer the duration, the more restrictive the agreement will be. A reasonable duration will vary depending on the industry and the circumstances, but it is important to ensure that the duration is not longer than necessary.
3. Scope of Activities
The scope of activities clause specifies the types of jobs or activities that the employee is prohibited from engaging in for competitors. This clause should be tailored to the specific job duties and responsibilities of the employee to ensure that it is not overly broad.
4. Confidentiality and Non-Disclosure
Employers may also include clauses that prohibit employees from disclosing confidential information or trade secrets to their new employer. These clauses are designed to protect the employer`s intellectual property and trade secrets. However, it is important to ensure that the confidentiality and non-disclosure clauses are not so broad as to prevent the employee from using general knowledge and skills acquired during their employment.
5. Consideration
Finally, it is important to ensure that the non-compete agreement includes adequate consideration for the employee. Consideration is a legal term that refers to the exchange of something of value in exchange for the employee`s agreement to the non-compete clause. This could include a signing bonus, salary increase, or other benefit.
In summary, non-compete agreements can be an important tool for employers to protect their business interests. However, it is important for both employers and employees to ensure that the clauses included in the agreement are reasonable, tailored to the specific circumstances, and provide adequate consideration for the employee. As always, it is advisable to seek legal counsel to understand your rights and obligations under a non-compete agreement.