Things to Think About When Designing a Non-Compete Agreement

non compete agreement lawyer

Minnesota Non-Compete Agreement Lawyer

Non-compete clauses are mainly used in companies where their employees are highly trained in specific areas. These are often high-tech companies where a disgruntled employee can take all of their contacts with them. It may be also used to save company secrets.

However, most of the time, these clauses are put in their contracts to make sure that their employees are not going to work for their competitor. This is enforced during employment and a specific period following employment. It doesn’t matter whether they quit or they were terminated. The non-compete clause will still hold.

Coming up with a good non-compete clause that works for your business can be difficult.

Here are some things to think about when adding one to your employment contracts.

Make sure that you know the laws of your state. In fact, each state is different. Some states allow you to enforce non-compete clauses while others prohibit employers from even having these in their contracts.

In Minnesota, non-compete clauses are allowed to be in effect depending on the time that it takes to train someone to replace the employee who left. New employees also have to get comfortable working with their customers so that they won’t follow the old employee.

Knowing that it can take months to get a new employee up to speed, it is common to have non-compete clauses that can last up to a year. There are times when two years is considered reasonable, though three or more years is often deemed unreasonable.

Remember that non-compete clauses are meant to protect your company. They are put in place so that your old employees can’t take your customers away from you. Many employees try to take their contacts with them to their new job and they shouldn’t be able to do so because it is going to hurt your company.

However, it is also important to remember that it is severely limiting the ability of your old employees to get a new job. Because of this, you can’t go overboard when you are designing your non-compete clauses. Though you may be hurt when they leave, you don’t want them to lose everything when they go. Make sure that your requests are reasonable before you start enforcing them.

One of the best ways to do this is by making your non-compete as specific as possible. Because your employees may struggle to find jobs, it is important that your non-compete doesn’t keep them from working at all. They can get a job but it has to be different than the one they just left.

If you have a social media marketing business, you might want to keep them from marketing through social media but they can work on television advertisements. If you own a clothing store, they can work in retail, just not in another clothing store.

If your business is concerned about losing customers due to the distance, you should only restrict it to the distance that you are used to doing business. For most small businesses, this keeps them from opening the same type of business down the street from yours! Usually, just limiting the town where your business is should be enough. Some businesses add a few extra miles to keep the competition away.

These are reasonable requests. You can’t limit them from working in the same state because that is going to be going too far! If you do, there is no way that your non-compete clause will hold up in court.

Most states require you to offer your employees an adequate consideration. Basically, this means that you need to see if you can offer your employees something so that they stay and continue working for you. You should try to make it worthwhile by offering them a different job with your company, a promotion, or even a raise. They may want to stay since they know that they are going to struggle to find new employment due to the non-compete clause.

Customize your non-clause agreements. While some companies use a generic non-clause agreement, that could be a mistake. A one-size-fits-all is not always in your best interest. Make sure that your non-clause agreement is catered to your business and your employees. In fact, you may end up writing several non-clause agreements for all of the different jobs that your business has.

Don’t be afraid to hire a lawyer. If you want to have non-compete clauses that are going to hold up in court, you need to have a lawyer by your side. He or she will be able to help you draft a non-compete clause that includes everything that you want (and then some). They will also make sure that your clause is fair. They know what is enforceable and what is not so that you have the best clause that you can.

Don’t forget to include what happens if they break the non-compete clause. While non-compete clauses should hold up in court; everyone needs to know exactly what will happened to the person who breaks it. A lawyer will be able to draft this section of the clause easily.

Non-compete clauses are used to protect your business, not punish your employees for leaving. For this reason, you need to make sure that your requests are reasonable. One or two years is enough to make sure that your new employees will be able to keep the contacts that were made by your old employee. If distance is a problem, limiting the town where you do business (and a small surrounding area) should be plenty. You can’t keep them from working in the entire state!

Because this is such a sensitive topic, it is important to hire a lawyer. He or she will discuss your concerns and help you come up with a non-compete clause that works for you. If you have multiple jobs, you may want to have several clauses. It is not a one-size-fits-all type of thing!

Contact us for all of your legal needs. We will make sure that your business has the best non-compete clause possible!