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

On Behalf of | Sep 21, 2022 | Blog, 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 establishment, the non-compete remains in effect for a specified length of time.

Even though you have the right to legally enforce such an agreement, you should notify your employees of your intentions. Adequately informing your workers of this restriction can reduce the risks of misunderstandings and disputes.

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. According to Business News Daily, 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 length 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 its scope. 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 fully disclose your intentions, as well as obtain a signature from your employees to who it applies. You should periodically review your agreement and update it as needed to maintain its effect and function.