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A non-compete agreement may need some limits

On Behalf of | Oct 10, 2022 | Business Law |

A non-compete agreement is a way for an employer to ensure that a worker doesn’t leave their business and start directly working for the competition. The employer may also use this as a way to ensure that the employee doesn’t learn how to work in the industry and then start their own company to compete with their former employer.

In other words, it’s a way for businesses to protect themselves while still being able to hire and train employees.

However, non-compete agreements can be detrimental to employees in some situations. As such, in order for them to stand up in court, they may need to have some limits.

A geographical limit

For example, you may have to put some sort of a geographical limit on your noncompete agreement, saying that it is only enforceable in a certain area. If there is no restriction, it would mean that your former employee could no longer work in their industry all across the United States, which would essentially mean that they were trapped in one job. It is highly unlikely that a court would ever allow such an order to stand. 

A time limit

Another example is that your non-compete agreement may not be allowed to stand forever. Perhaps an employee took a job because they wanted to start a company like yours, and they wanted to learn more about it with firsthand experience. You don’t want them to instantly leave and become the competition, but it would be unfair for an employer to have endless control over what someone did, even decades after they left that company.

You can see how noncompete agreements are useful, but they can also be complicated, so make sure you know exactly what legal steps to take