As today’s business world becomes more intertwined, many companies are finding themselves having to do more and more to stay competitive. Because of this, it has become increasingly important for them to maintain every advantage they have, be it technological or otherwise. To help accomplish this, companies often require their employees to sign non-compete agreements as a condition of employment. Considered a legally-binding contract between both parties, it can be an effective tool in helping keep valued employees from going to work for your company’s competitors, sharing trade secrets, and much more. However, since these contracts are quite complex and sometimes looked upon with disfavor by employees, questions may arise as to whether it is in fact necessary. If you have these same questions, here are some important facts to consider.
Working for Competitors
In many types of industries such as technology and broadcasting, non-compete agreements are used regularly to ensure employees who leave one company cannot immediately go to work for a competing company. While on the surface this can seem as if it would make no difference for whom a person works, the consequences for one company could be devastating. For example, should an employee go to work for a direct competitor, chances are they can take with them various trade secrets and other crucial information that could provide their new employer with a significant competitive advantage. Rather than take this risk, it is much better to work with a non-compete attorney in Tampa to draft comprehensive documents that will stand up in court should the need arise.
Protecting Intellectual Property
If you want to eliminate the chances your employees will share intellectual property ideas with a competitor, always make sure they sign a contract with your company. Primarily aimed at writers, designers, and developers, having these agreements in place can often reduce the chances there will be conflicting products within the marketplace, which could lead to long and costly lawsuits concerning patents and other similar matters. Whether your business is brick-and-mortar or web-based, protecting intellectual property is of the utmost importance in today’s digital age.
Knowledge is Power
If there is one thing the best companies know very well, it is that knowledge is power. Thus, if your company has numerous trade secrets such as formulas, high-tech innovations, and other ideas that are unique, non-compete agreements will make sure your trade secrets do indeed stay for your eyes and ears only. By making these standard within your company, you can make sure that should similar products arrive on the market, yours will still be unique and stand out from the competition.
Keeping Top Talent
Of all the reasons for having employees sign a non-compete, the most important may be in that these understandings will allow your company to retain the very best people within your industry. Depending on the employees involved and the company itself, various trade-offs may need to be had in order to give employees added incentive to sign. In most cases, this means extra compensation and other benefits.
Should your company use freelance workers on a regular basis, it is always best if they sign a non-compete prior to beginning their work for your company. Once this agreement is signed, it will prevent freelancers from bypassing your company and instead going directly to your clients when seeking work. Also, if they attempt to gain work from your clients while still working for you or soon after they stop being associated with your company, having the NCA in place will allow you to take legal action if necessary.
Access to Sensitive Information
When employees will have access to highly-sensitive information of any type, a non-compete should always be at the top of your priority list. Whether the information involved is that which could put others at risk or is state-of-the-art high-tech secrets that could be sold to the highest bidder who desires the employee’s services, failing to have this legally in place could have devastating consequences for your company.
Protecting Customer Lists
If your business relies on salespeople to sell various products or services to customers, always have these employees sign as a condition of employment. No matter the types of products or services being sold by your company, there will be trade secrets as well as valuable customer lists that could be in jeopardy. Should no agreement be in place when a top salesperson leaves your company, it is possible they could take their account list with them to your competitor, ultimately resulting in your company losing a substantial amount of business.
Make the Agreement Very Specific
In many instances, companies make the mistake of drafting contracts that are much too broad in terms of what they cover. As a result, employees who choose to challenge such agreements in court often walk away as winners, enabling them to reveal your company’s most valuable secrets to others.
If you want to avoid this legal and business disaster, always have non-compete that are as specific as possible. To do so, you should not only know the main objective of the agreement, but also do all you can to make sure no loopholes exist that could be used against you and your company. Rather than try to draft this comprehensive information on your own and then hope for the best, work with an experienced non-compete attorneys in Tampa who can give you an airtight contract that will always hold up in court.
Know Your State’s Laws
Before you go to the trouble of creating a non-compete agreement, make sure your state’s laws will actually recognize and enforce it. Also, in some cases, you may not actually need an actual contract. Instead, a non-disclosure or confidentiality contract may work just as well. Ultimately, your goal as an employer is to ensure your rights are protected as much as possible. Therefore, always seek out the advice of a knowledgeable attorney who handles such situations on a daily basis.
What To Include
Upon finding out your company is using a non-compete agreement, schedule a meeting with an attorney who can listen to you and then recommend what provisions should be included in the documents. In most cases, these will include the date it becomes effective, specific reasons why it is needed, which parties are included, the time period for which it will be effective, and which if any parts of it will be open to negotiation between both parties should any legal challenges be made by either party.
Depending on your company’s industry and the importance of the employee’s job, it may also be necessary to list certain benefits the employee will be entitled to by signing the document, such as a promotion, pay raise, or other benefits. Since some employees view these agreements as being restrictive, providing them with additional perks can often be crucial to building loyalty.
Don’t Take Unnecessary Chances
Finally, there is no need whatsoever to take unnecessary chances with your company’s most valued trade secrets, technology, and customer accounts. By having an non-compete in place from the outset, you and often the employee can both have peace of mind. If you need to discuss the pros and cons of these documents and how they may benefit your company now and in the future, consult soon with a lawyer.