Specific industries are more competitive than others. The companies in those industries may have to put in more effort to stay relevant and make money. Since the companies compete against each other on the market, they often would rather not have to worry about competing against their employees.
That is the basis of the Non-Compete Agreement. Before you spend many resources on training an employee to become a star performer, you can use this document to ensure the employee will not leave you in the lurch. After having benefited from all the training, they could pursue employment at a competitor or start a company competing against you or your company.
The Non-Compete Agreement is most commonly entered into between an employer and its employee. It can also be used when hiring an independent contractor. It's vital to note that even though most states recognize the Non-Compete Agreement, California, Oklahoma, and North Dakota do not.
One of the reasons an employer may choose to require Non-Compete Agreements, besides the provision mentioned above of expensive training for employees, is to reduce turnover. However, this agreement may reduce a company's bargaining power and negatively affect it in the long run.
Depending on your state, a Non-Compete Agreement may also be known as:
Specific industries depend on the Non-Compete Agreements more than others, for example, the tech industry. However, anyone can ask employees to sign a Non-Compete if they want to protect against the competition.
Usually, these types of agreements are presented to new employees in the hiring process. It is just as common to induce current employees to enter into such a contract.
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A Non-Compete does not have to be complicated, just as long as it is thorough. Lowering your competition is one less thing you have to worry about. All you need is a ready-to-go template and a few details.
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An employee does not have to sign a Non-Compete Agreement, in which case it is within the employer's right to withdraw the job offer. For the agreement to be legally binding, both parties must sign it. Notarization is not required by law, but you could choose to have a witness at the signing.
After the signing, both parties should receive a copy of the Non-Compete Agreement. Companies usually keep their documents in the HR department, along with other employee files.
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