Depending on what kind of business you manage, you may have certain proprietary information – or trade secrets – that you need to protect. You spend countless hours and thousands of dollars training new and existing employees. The last thing you want to do is have your employees leave and take your secrets with them.
A lot of companies try to curb this by having their employees sign non-compete agreements. Any business lawyer in Connecticut will tell you that these agreements are hard to enforce. The law does look favorably along any agreements that restrict a person’s right to work.
However, if narrowly tailored, your company’s non-compete agreement may be enforceable. The law does recognize that businesses have a right to protect the fruit of their labor. Some companies spend millions of dollars on research and development. It wouldn’t be fair for an employee to take all of that information to a local competitor.
If you’re concerned that your company’s current non-compete agreement is too broad, you should contact a business lawyer in Connecticut. They can review your current agreement and make recommendations on how to make it more enforceable.
What are the Two Main Components of a Non-Compete?
Non-compete agreements are intended to do two things: protect your proprietary information and restrict your employees’ ability to work for your competition. The courts are generally more likely to enforce your efforts to protect your proprietary information. They’re not keen on limiting an employee’s ability right to work.
The section that deals with trade secrets are typically enforceable as long as they are reasonable. Most non-compete agreements protect the following:
- Product information
- Sales strategy
- Client lists
When it comes to limiting a former employee’s right to work for another company, the courts are not so liberal. Most non-compete agreements are very broad. They limit an employee’s ability to work for a company within a certain geographical area. They also have a time limit on this restriction.
If a non-compete agreement is fair and reasonable, it may be enforceable.
What are Some Tips for Drafting an Enforceable Non-Compete Agreement?
If you want the courts to enforce your non-compete agreement, you have to make sure it’s fair and justified. The courts will look at these two things separately.
- Is the agreement reasonable and fair?
- Your agreement can only last for a reasonable period of time. Most agreements are valid for about 1-2 years. Anything longer than this, the court will probably strike it down.
- The geographical area must be limited. The courts aren’t going to let an employer restrict someone’s ability to work. So, while the court may allow an agreement to restrict your working in Harford, it wouldn’t let you prohibit them from working in the State of Connecticut.
- The scope must not be too broad. You can’t limit someone’s ability to work. If your agreement prevents someone from working in an entire industry, it probably won’t be enforceable.
- Is the agreement justified?
- Each industry has their own unique types of trade secrets. For example, if you own a cookie factory, you’re perfectly justified in prohibiting former employees from giving your recipes to their new employer.
- Client lists may be considered proprietary information. However, it’s hard to prevent someone from contacting your clients and trying to solicit business once they leave your company. Typically what happens is the employee’s new company will find some other way to achieve this.
- You can only restrict certain types of behavior. A non-compete that states that an employee can’t work anywhere within 300 miles will probably be struck down. The agreement has to be more limited in scope.
Your business lawyer in Connecticut can draft a non-compete agreement that protects your company. They’ll make sure it’s limited enough in scope that it will be enforceable. Most employees will challenge their non-compete when they leave your company. Usually, their new employee will pay the legal fees for them to do this.
Contact a Business Lawyer in Connecticut Today
If your company is having a difficult time having their non-compete agreements, you need to call a business lawyer at Aeton Law Partners. They can review your current agreement and see what parts need to be refined.
Call today and schedule a meeting with one of our competent business lawyers. They have experience drafting non-compete agreements that are enforceable and effective. You’ve spent years building your business. Don’t let an errant employee threaten your hard work.