Nowadays, there is competition in many fields of business. The nature of business is employees coming and going and companies doing everything in their power to protect their interests.
That is why the Employee Non-Compete Agreement is not an uncommon procedure when hiring new employees. Not every state has the same policy concerning the implementation and enforceability of Employee Non-Compete Agreements.
But in many instances, the companies choose to include them to prevent large workforce turnovers.
An Employee Non-Compete Agreement is a legally binding document between an employer and its employees. It states that the employee agrees to not compete against the employer, such as starting a business that competes in the same field.
The scope of this agreement can vary in duration and geographical area. For example, the contract may only cover the non-compete aspect when the employee is still working at the company, which prevents them from seeking additional work in the same field.
Also, it could prevent them from seeking employment at a competitor after they leave the company. That's where the time and geography clauses come in.
The Employee Non-Compete Agreement can be difficult to enforce if it is too restrictive, so it should consider the employee. Also, an employer can introduce an Employee Non-Compete Agreement at any time, not just at the start of employment.
Depending on your state, an Employee Non-Compete Agreement may also be known as:
In most cases, companies owning proprietary technologies and information require employees to sign an Employee Non-Compete Agreement. Others may have to spend valuable resources on training workers and would rather not have that come back to bite them later.
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An Employee Non-Compete Agreement doesn't have to contain too much information, just the right information. That means if you miss something, the document could end up unenforceable. That's why a practical template goes a long way.
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When all clauses and provisions are outlined in the document, both the employer and employee sign the form. Only then will it be legally binding. The employee may refuse to sign it, but, depending on the state, the employer has the right to rescind the job offer.
Also, the document doesn't require notarization or a witness by law. However, you may choose to include one or both if you want another layer of authentication.
Once an Employee Non-Compete Agreement is signed, both parties should keep their copies. Also, a copy of the agreement should be attached to the Employment Contract and sent to the company's HR department.
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