Your client base is an asset worth protecting. Having an employee leave with clients or other proprietary information, and go to work for a competitor, or to open a competing business, can cause a severe setback for your business. Not having an employee sign a non-compete and nondisclosure agreements can be a mistake. Without one, employees are free to transfer portable relationships, customer lists or proprietary information to a new job or business. Putting non-compete and a non-disclosure agreements in place will provide the assurance and peace of mind necessary to help you grow your business free from those concerns.
Business owners are best served by securing such agreements with employees who have access to sensitive proprietary information such as customer lists, formulas and processes, business plans, pricing strategies, salary structure, contracts, computer systems and intellectual property. To be enforceable, protective agreements need to be reasonable in time and scope. They should be given limits that make sense with regard to the length of time that they run, and how large a geographic area they protect. They need to be tailored to your business, to the employee’s job, and to the information that you want to protect.
Employers may impose blanket noncompete agreements on all their employees without consideration as to whether or not they are enforceable. Consequently, the employer may face a lawsuit that could have easily been prevented. Accordingly, while an employer should not risk going without one, it’s very important that these agreements be tailored to the employee’s position and be reasonable, based on the particular situation. Creating a unique noncompete agreement for each employee affected minimizes the chances that the agreement can be challenged in court.
If this triggers a concern for you, seek legal counsel to make sure that you have not left your business vulnerable to a severe setback.
Your client base is an asset worth protecting. Having an employee leave with clients or other proprietary information, and go to work for a competitor, or to open a competing business, can cause a severe setback for your business. Not having an employee sign a non-compete and nondisclosure agreements can be a mistake. Without one, employees are free to transfer portable relationships, customer lists or proprietary information to a new job or business. Putting non-compete and a non-disclosure agreements in place will provide the assurance and peace of mind necessary to help you grow your business free from those concerns.
Business owners are best served by securing such agreements with employees who have access to sensitive proprietary information such as customer lists, formulas and processes, business plans, pricing strategies, salary structure, contracts, computer systems and intellectual property. To be enforceable, protective agreements need to be reasonable in time and scope. They should be given limits that make sense with regard to the length of time that they run, and how large a geographic area they protect. They need to be tailored to your business, to the employee’s job, and to the information that you want to protect.
Employers may impose blanket noncompete agreements on all their employees without consideration as to whether or not they are enforceable. Consequently, the employer may face a lawsuit that could have easily been prevented. Accordingly, while an employer should not risk going without one, it’s very important that these agreements be tailored to the employee’s position and be reasonable, based on the particular situation. Creating a unique noncompete agreement for each employee affected minimizes the chances that the agreement can be challenged in court.
If this triggers a concern for you, seek legal counsel to make sure that you have not left your business vulnerable to a severe setback.
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