When to Hire a Business Attorney for Non-compete Clauses

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Once you get into a business partnership with an accomplice or anyone else for that matter, the last thing you will be thinking is the possibility of the two of you parting ways in future bringing your business partnership to an end. When hiring an employee, you equally don’t imagine that they will one day stop working for you and instead partner with your competitors.

Unfortunately, cases of employees going rogue and joining competitors in rivaling the original employer are very rampant in America. Thanks to non-compete clauses and agreements, businesses and companies are protected from these maligned acts of business ‘backstabbing’.

Non-compete clauses and Agreements

A non-compete clause in a business contract is a clause in a company’s contract which restricts an employee or a shareholder in the company from providing services or taking part in business in certain locations or in a given niche for a given period of time in a way that would compete with the company’s current business.

This basically means that those individuals who agree to sign that contract- shareholders and employees, agree not to share your business ideas with direct competitors. This way, your company will never lose its employees to your direct competitors who will take up the knowledge shared by the rogue employees and use it to compete against you.

There are various provisions made by non-compete clauses and agreements which are used to protect U.S companies’ interests. Here are the most common provisions

Restricted geographical area

A non-compete clause only restricts the employees or individuals from working or sharing the knowledge within a specific geographical location which can be within a given state, city or even in some special cases the entire country.

The effective period of the restriction

This dictates the effective date and period over which the non-compete can be enforced. The period can vary from one year to up to 50 years depending on the product the company is looking to protect and the structure of the company.

Penalties to be incurred

This outlines the penalties which the parties that breach the agreement will incur. The penalties can be anything from jail term to cash penalties. To reduce the chances of employees going rogue and joining competitors, it is important to ensure that they understand the various clauses properly and the ramifications of breaching the contracts which they sign.

Compensation for not competing

On the bright side, it should be noted that there is compensation for employees and individuals who upkeep the contract and don’t compete. This compensation can be a long term employee contract or retirement benefits to keep the employees working with the company for as long as possible.

Non-solicitation clauses

Some companies’ non-compete clauses have special non-solicitation clauses within them to protect the employees and partners from being approached by other competing companies. This way, the chances of other companies trying to lure your employees into joining them will be very low and if they attempt to, they will face the penalties outlined in the non-compete clauses.

Signing of non-compete clauses

If your company intends to have its employees to sign non-compete clauses, it is important to ensure that there is a business attorney present at the signing. Although it is not a legal requirement for an attorney to be present during the signing of the non-compete clauses, it is crucial to have an attorney present.

The business attorney will not only help to draft the non-compete clauses and agreement but will explain the contents therein to the employees and employers to ensure that there is no miscommunication whatsoever. Non-compete clauses have very confusing terms and without proper examination and scrutiny by a well versed attorney, it is possible for employees and employers to sign documents which can potentially be used against them in the future. The attorney will thoroughly go through the entire to ensure that it is enforceable and that all clauses protect your company’s interests.

Some attorneys also offer a special service where they educate the employees and partners on the significance and ramifications of signing the non-compete clauses. Such services are normally charged extra amounts of money but are very crucial to companies. Once educated and made to understand the ramifications of breaching the contracts, the chances of employees and partners going rogue are very minimal- this is a good thing for any company.

Let Toppins help you with your non-compete clauses

Are you looking for the best legal service providers to help you with the drafting and signing of non-compete clauses, well, look no further than Toppins Law Firm! We have some of the best and most experienced business attorneys in the market and drafting and overseeing the signing of non-compete clauses is our cup of tea.

For more information on non-compete clauses and agreement, give us a call here at Toppins Law Firm and we will gladly be of service.