Three reasons noncompete agreements are good for businesses

On Behalf of | May 17, 2021 | Employment Law -- Employer |

Jobs are important to most Pennsylvania residents because they require incomes to survive. In the past, many individuals found work with employers and stayed with them until their retirements. Now, however, many workers jump from employer to employer as they seek better options for themselves and their careers.

The movement of workers through the work force can create confidentiality problems for employers who have interests in protecting the secrets of their operations and production. One way that employers can protect these valuable assets is through the execution of noncompete agreements. Noncompete agreements provide security for employers from the unauthorized disclosures of information by employees and former employees. While this post does not provide any legal advice, it offers readers some explanations for why noncompete agreements can benefit employers who work in Pennsylvania.

Reason #1: Business secrets make businesses successful

Most businesses do not possess monopolies over their chosen industries. Because they must exist in markets with competition, businesses find ways to distinguish themselves and their products so that consumers choose them over others. Often, those things that distinguish products from others are specially formulated secrets that make a business’s products unique and special.

A business secret or trade secret is a vital asset to an entity that wants to maintain its competitive edge. Through a noncompete agreement, an employer can prevent a former employee from going to a competitor business and using the secrets they learned to benefit the original employer’s rival. Noncompete agreements can help businesses protect their trade secrets.

Reason #2: They help businesses retain workers

Noncompete agreements are often negotiated before employees sign on to work for businesses. Through the negotiation process, a prospective employer and a prospective employee make work out the terms of the employee’s compensation and the employer’s requirement of signing the noncompete agreement. When bound to a noncompete agreement, an employee has a clear understanding of the expectations that they will be held to with regard to the information and secrets they learn through their employment. Noncompete agreements therefore help businesses attain and retain workers through by establishing understandings about expectations.

Reason #3: They are legally enforceable when broken

A properly executed noncompete agreement is an enforceable contract. A contract is a legal device that gives the parties who sign it certain rights to enforce or seek damages when the other breaches. In the case of a noncompete agreement, a business can use their legally executed noncompete agreement to prevent a worker or former worker from disclosing information or other prohibited data with others that they learned from their employment with the aggrieved business. It is important that businesses understand, though, that noncompete agreements must be specifically tailored and meet certain requirements in order to be considered valid.

Noncompete agreements are beneficial to businesses. They can help entities advance their success in their chosen markets. Employers that wish to integrate noncompete agreements into their hiring and retention practices for employees can reach out to trusted business litigation attorneys for help.