What is a Non-Compete Agreement?
A non-compete is a valuable tool for employers that acts as a contract where an employee makes a promise not to enter into competition with the employer over a specified period of time after the employment period. They also restrict an employee from revealing confidential information or trade secrets during employment, and after the job, the period has ended.
Why do you need to use a Non-Compete Agreement?
Employers use a non-compete agreement to protect their companies from having an employee work in the same industry during or after their employment. Non-competes usually specify a period of time establishing how long the non-compete will stay in place.
When do you need to use a Non-Compete Agreement?
In most circumstances, an employer will present a non-compete agreement upon commencement of employment. Employers may also require independent contractors or also consults to sign a non-compete. When presenting a non-compete agreement to an employee, it is good practice to welcome any questions they may have and go through the document with them.
Are there any deadlines or times for when this form is needed?
It is a good idea to have the employee sign a non-compete agreement before the commencement of employment. Although rare, an employer will sometimes require an employee to sign a non-compete agreement at some point during their employment. The employee should have an attorney review the non-compete and return to the employer in a reasonable amount of time. Most employers require the non-compete agreement to be returned before the employee is permitted to begin work.
What are the main things that go on this form?
The form should include an effective date that defines when the non-compete agreement is to begin. The form should also include a reason for the agreement. The reasoning is typically the employer protecting themselves against former employees revealing trade secrets, protect confidentiality, soliciting clients, or other employees.
The non-compete agreement should also include the specific dates whereby the employee is restricted from working in a competitive nature (as defined in the non-compete agreement). If there is a geographical restriction, the agreement should define the scope and distance.
Further, the employer should include the name of the employee and explicitly define the work that is prohibited. The agreement should identify the jurisdiction. The employer should aim for the non-competition agreement to be as unambiguous as possible to ensure enforceability.
What are the most common mistakes to avoid?
The legality of a non-compete agreements varies from state to state. States like Oklahoma, California, Hawaii, and North Dakota have deemed non-compete agreements unenforceable.
The key with a non-compete agreement is to act within the best interest of the employer and the employee. Many states have agreed that a non-compete agreement should not be overly burdensome to an employee concerning time and geographic scope. They should also avoid restricting an employee’s ability to find work after the employment relationship has ended.
Do I need to use a lawyer, accountant, or notary to help me?
It is always a good idea to have a lawyer review the draft or content of any legal document. A lawyer should be knowledgeable about your specific state laws to ensure your agreement is enforceable.
What is the easiest way to create a Non-Compete Form?
A non-compete/non-competition form can be created here on the site. The employer has the power to make the form as detailed, or as simple as they’d like.
Currently, there are no laws or statutes in place that require a non-compete be notarized. However, both parties to the agreement must sign for the agreement to be enforceable and valid.
It is essential to know that a Non-Disclosure Agreement (NDA) and a non-compete agreement are not the same. An NDA deals with confidentiality and protects the company in the event of a breach. A non-compete acts to restrict employees (current, or past) from entering into a competitive market place within a specific amount of time or outside the defined geographical scope.
Why use our Non-Compete Form generator?
Our non-compete generator conducts an interview-like process. You will be asked questions about your preferences and have the ability to tailor it to your company’s needs. Our process is quick, easy, and efficient. You will be able to download the form as soon as you complete the questions, and your document will be customized to meet your needs. You can aslo come back at any time and make any additions or revisions you see fit.