We’ve often been asked. What matters more—a former employer’s intellectual property and business assets or an ex-employee’s right to fair future employment opportunities? Such a question often arises when we encounter employment breakups. And such endings can hurt, especially if non-compete agreements are involved. Fortunately, the more recent reforms to state laws have taken a closer look at the welfare of both parties when it comes to imposing non-competes. In this article, we seek to explore what non-compete agreements are, their pros and cons on both sides (employers and employees), and how some newer state laws have embraced a few, more promising changes to how non-compete clauses should work.
What Is a Non-Compete Agreement?
A non-compete agreement is a formal and legal agreement between an employee and an employer. It enforces a restriction on the employee, making them promise not to “compete” with the employer after the employment period is over. Under a non-compete contract, a former employee could be restricted from working under the former employer’s competitor for a specific period. The former employee could also be prohibited from becoming a direct business competitor. This agreement helps protect the employee’s intellectual property, including customer or client lists, best business practices, trade secrets, and marketing plans. Noncompete agreements can also be in the form of noncompete clauses and may also be known as non-compete covenants.
Understanding How It Works
Non-competes are signed when the employer-employee relationship begins. The contract terms may include the geographic location, market, and length of ...