Three R’s of Non-Compete Agreements: Requisite, Righteous and Reasonable
Companies in highly-competitive or intellectual property-based industries need to know how to draft enforceable non-compete agreements for their employees. While non-competes can improve retention or impact other employment issues, they can also help employers protect their business interests when employees leave to work for competitors or to start small businesses in the same industry. Following the guidelines of requisite, righteous and reasonable can aid New York employers in developing legally sound non-compete agreements.
Requisite to the Business
In general, non-compete agreements are not favored by the law. To make them more effective, they should convey restrictions that are requisite, or necessary, to protect an employer’s business interests. Employers should require their employees to promise not to disclose confidential or trade secret information, compete directly with the company or interfere with company business or relationships. Non-competes can also state that employees give up all rights to the intellectual property they create during employment.
Righteous to Employees
Non-compete agreements should also be righteous to employees. They should forward legitimate business interests without putting undue hardships on the employees, unless there is clear and convincing evidence to do so. In order to ensure the non-compete restricts only the most crucial business information and activities of the employee after leaving, employers should be sure to know which information is proprietary, train employees on these trade secrets and develop policies and procedures to internally monitor and protect use of this information.
Reasonable to Enforce
New York allows employers to draft and present non-compete agreements to their employees, but employers should be careful to check that non-competes are in compliance with both local and federal laws to aid in enforcement efforts. Non-compete agreements should be reasonable in things like scope and geography, and not just a way to prevent employees from working after leaving. Documenting an employee’s conduct and work efforts, as well as preserving evidence like computers and emails after they leave, can prove helpful if litigation occurs.
Employment Best Practices
When non-compete agreements are drafted well and applied under the right circumstances, there are some added benefits for employers. Non-competes can also help to improve things like retaining employees, clarifying employee expectations and instilling customer confidence. Employers should use non-compete agreements as an important business tool, but one that should be wielded skillfully and with care. In addition, both large and small employers should consult employment attorneys before using any new or revised non-compete agreements.
If you need help with drafting, revising or validating your non-compete agreement, contact a New York employment law attorney. An employment law lawyer with experience drafting, enforcing and litigating non-competes in New York can help you ensure your agreement is requisite, righteous and reasonable and will hold up under a court’s scrutiny.