Non-compete agreements may be unnecessary for every employee

On Behalf of | Aug 2, 2022 | Business Law |

A non-compete agreement can be a valuable tool for your company. Because this document can protect sensitive information, you might want one for most employees. However, this agreement may not be enforceable if it covers every employee in your company.

According to Business Law Today, courts may not uphold a non-compete agreement if the terms are too restrictive. The terms extend to the employees required to sign the document.

Which employees need a non-compete agreement?

The people at your company may not require the same information to do their jobs. Researchers, for example, could use trade secrets every single day. However, the employees making a product may only need some protected information to perform their jobs. People in administrative positions may never need to know these details. Before you ask employees to sign this document, consider the information they access every day.

If a former employee lodges a complaint about the non-compete agreement, a court usually evaluates the person’s daily duties. If the court finds that this person did not use confidential information, officials could rule that the document is invalid. This could potentially jeopardize the agreements you use for high-level employees.

How can you protect your company?

You can take several steps to make sure that your non-compete agreement is valid. Business News Daily says that the document should have reasonable terms. You might review the details and tailor them so that lower-level employees do not face as many restrictions. Additionally, you may consider whether some people should sign a non-disclosure agreement instead. This prevents people from sharing sensitive information but provides fewer restrictions.

You may consider having a professional review your non-compete agreements. This can help ensure that the document has reasonable terms for each employee.