What should you tell your employees about a non-compete?

On Behalf of | Sep 21, 2022 | Employment Law -- Employer |

Non-compete agreements allow you to put provisions in place to prevent employees from leaving your company to work for a competitor. If one of your employees chooses to leave your organization, the non-compete remains in effect for a specified period of time.

Even though you may have the right to legally enforce such an agreement, you may want to inform your employees of the terms of the non-compete clause. Adequately informing your workers of non-compete provisions may reduce the risks of misunderstandings and disputes. If you have questions about these matters, you can also consult with an employment law attorney with experience in non-compete agreements and litigation.

The purpose of the agreement

When you hire new employees, you should thoroughly review the employment contract with them. During this discussion, you can disclose your purpose for having a non-compete clause. Some reasons you might have your employees sign a non-compete agreement include the following:

  • To protect client lists
  • To safeguard confidential information
  • To reduce turnover
  • To optimize employee development resources
  • To prevent employees from starting competitive businesses using your intel

The duration of the agreement

Make sure your employees understand what they sign before you request a signature. This should include how long you plan to enforce the agreement. The duration of a non-compete could take into account several aspects, including the location of your business and the geographical scope of its operations. Unrealistic or unfair agreements can have serious legal repercussions, especially if a former employee takes you to court.

Putting an agreement into effect requires you to obtain signatures from your employees to whom it applies. You should periodically review your agreement and, as needed, update it to maintain its effect and function. After an update, it is important to inform your employees and again have them agree to the non-compete clause.