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Non-compete agreements

On Behalf of | Nov 30, 2022 | Business Law Litigation

Non-compete agreements have historically been subject to controversy. These agreements, when enforced by the courts, have served employers well in protecting their private information. On the other hand, some employees argue that these agreements limit their ability to seek better jobs.

What is a non-compete agreement?

non-compete agreement is a contract or clause in a contract in which one party promises the other not to compete with the other party, not to work with or for competitors, and not to reveal proprietary information to anyone during or after the contract expires. The intent behind these covenants is usually to protect employers from losing valuable data that could potentially hurt them if that information reaches another party, such as a competitor.

Are non-compete agreements enforceable?

The validity of these contracts or clauses has been the subject of questioning by the courts. Most of the time, however, they are usually valid if drafted properly. Even though some employees dislike them because they argue that it limits their ability to leave the company for higher paying jobs (e.g., competitors), if used properly they serve an important function in business.

Regulation of non-compete clauses

State laws regulate non-compete agreements. As such, it is crucial to understand the precise wording of the law in the state where the agreement is drafted and executed. Those who do understand this can ensure its validity and enforceability in the event that someone challenges it in court.

Non-compete agreements and clauses can be beneficial to employers to protect their proprietary information, and often enforceable and valid if drafted properly.

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