Why do I need a noncompetition agreement?

Few things are more  frustrating (and potentially devastating) to a small business than to spend time training and educating an employee, only to have that employee leave  and start a competing business. It can be even worse if that former employee then starts to lure your remaining staff away to work for the new competitor. Without a written agreement between your business and the key employee, this can happen. Enter the noncompetition agreement.  A properly written noncompetition agreement can do the following to protect your investment in your key employees:

→ Prohibit the employee from working for, or starting a competing business within XX miles of your business location

→ Prohibit the employee from soliciting business from your customers after the employee leaves your employment

→ Prohibit the employee from encouraging your remaining employees to quit and go to work for the competitor

Should I have all of my employees sign a noncompetition agreement?

Not necessarily. However, noncompetition agreements are strongly recommended for those employees who:

⋅ Will receive specialized training that is unique to your business and that could help a competitor

⋅ Are exposed to confidential, non-public  information about your company that could help a competitor

⋅ Have developed strong customer/client relationships

I’ve heard that noncompetition agreements aren’t enforceable; is that right?

Look for the next blog posting on this important subject.