8 Things to Know Before You Use a Non-Compete Agreement

When a valuable employee leaves an employer to start their own business or to work for a competitor, that employer may feel vulnerable to losing customers or trade secrets. That is why many employers make employees sign non-compete agreements. However, in New York and many other states, non-competes must be properly drafted or they will not be enforced. As a general rule, employers need to avoid a one-size-fits-all approach. For a non-compete to be effective it must be properly drafted taking into account the particular facts and scenarios between the employer and the employee such as the employer’s business, the employee’s role within the employer’s business, and the type of information the employee has access to.

To be enforceable, the non-compete must contain the 8 elements I describe in the infographic below.

Feel free to download a PDF version HERE.

For a strong agreement, you may also want to add the following provisions to a non-compete:

• a non-solicitation of employees;

• a non-solicitation of customers or clients;

• a confidentiality provision;

• a tolling provision to suspend the start date for the restrictive period after the employee has breached the agreement or is in litigation over it;

• a garden leave provision;

• a notice that the employee provides a unique, special, or extraordinary set of services;

• a specification that the non-compete applies after termination of employment for any reason; and

• a notice of immunity under the Defend Trade Secrets Act.

Feel free to consult me for guidance on drafting or reviewing your non-compete agreements and all other types of contracts and agreements at www.djimlaw.com/contact-me. If you enjoy this kind of information, advice, and news, then subscribe too.