Whether your employees work
directly with customers or in the service bay, they may come into contact with
sensitive, competitive information that they could potentially use to establish
a competing business nearby.
Non-compete agreements may
help your business safeguard trade secrets and other information, but only if
they hold up in court.
Some things to consider when
creating non-compete agreements include:
• Length and scope: The
agreement generally will be considered enforceable only if it’s
"reasonable" in duration and geographic scope. Agreements that
restrict former employees from working for a competitor for up to one year are
usually considered reasonable.
• Fairness: Provide
employees with a copy of the agreement to review before they start working, and
give them a chance to consult legal counsel and ask questions. Although not a
legal prerequisite for enforcement, these steps make an employer seem more
sympathetic and reasonable and increase probability of success in litigation.
• Timing: Establish a non-compete
agreement before an employee begins working. In some states, waiting just a few
weeks could hinder the enforceability of the agreement. For a non-compete
agreement to be executed after an employee starts, the employer must offer
additional consideration – such as a raise or benefit increase – in exchange
for the restrictions.
- Source: Tire Review
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