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Safeguarding a business via restrictive covenants

On Behalf of | May 16, 2022 | Non-Compete Agreements

Companies in New York and elsewhere may rely on unique product designs and procedures to promote growth and may wish to take every possible measure to safeguard sensitive information. In some cases, part of protecting a business could involve including restrictive covenants in company contracts. While restrictive covenants could provide various benefits, knowing when such measures might be applicable or how to implement similar protections can be a complex task.

Types of restrictive covenants

While restrictive covenants may be common in employee contracts, such measures could also apply to other arrangements, such as partnership agreements. One common example of a restrictive covenant may include noncompete agreements. Such agreements may include terms in which one party agrees not to compete with the other and this agreement may persist for a set period and apply to a specific area.

Nondisclosure agreements are another common type of restrictive covenant and those who sign such as agreement may be prohibited from disclosing sensitive company information to other parties. This may apply to anything from unique operational procedures to confidential company trade secrets. Another type of restrictive covenant may include a non-solicitation agreement, which could provide protection against solicitation of parties such as customers and employees.

Implementing restrictive covenants

While restrictive covenants could provide a business with various protections, preparing to implement such measures might not always be a simple task. As restrictive covenants can be complex in nature, companies who wish to protect their interests through similar means might benefit from retaining the services of an attorney for guidance. An attorney in New York can help a client better understand the applicable uses of restrictive covenants and assist in creating a strategy that best aligns with the needs and interests of the company.


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