Typically, non-compete agreements are reserved for executives or people who work at companies that are in the tech industry. However, according to The Washington Post, there are noncompetition clauses popping up in employment contracts across a number of sectors – some of which may be surprising. For example, Jimmy John’s, a sandwich shop, now has employees agree to a non-compete. The Post reports that one in four workers have signed such a document at some point, and 12.3 percent of the labor force is bound by one right now.
As an employment law attorney in Illinois would know, non-compete agreements are largely intended to prevent workers from taking their talents elsewhere. Both business owners and employees should know what to look for in such a document, including these three necessary factors:
- Time period
While there is no set rule on how long such an agreement can last, it is a good idea for business owners to make sure that the time period included is reasonable. As an employment law attorney in Illinois may have seen, six months to two years is safe bet. Anything longer could bring unwelcome scrutiny from a court should the agreement be challenged.
According to The National Law Review, a non-compete agreement is a good way to protect a business. The document can do the following:
- Discourage a worker from disclosing trade secrets
- Prevent a valued employee from leaving for a competitor
- Soliciting a company’s current clients
Experts warn businesses not to make the scope of an agreement too restrictive, however. For example, prohibiting a worker from leaving for too many types of businesses or industries could be deemed as unreasonable that nullify the contract. A business owner should outline the goals for the contract and avoid any overreaching language.
Lastly, anyone signing a non-compete agreement should make a note of the geography specified. Employers will typically prohibit a worker from joining the competition in their service area. If the agreement lists an area outside of where the company does business, a court could rule the contract is invalid.
If an agreement is too broad or too restrictive, a court may rule that it is unenforceable. Finding a good balance will ensure the contract’s validity. At the same time, employees should look to protect themselves during the process. In many instances, the company will provide a benefit to a worker who signs an agreement, such as extra training.
It is wise for anyone drafting or signing an employment contract to understand how the document works. People with questions regarding this matter should consult with an employment law attorney.