The term non-compete agreement is thrown around a lot in the corporate world, but a document actually needs a few things to be considered a valid, binding non-compete agreement. If you are unsure about whether or not an agreement you made is legally sound, then schedule an appointment with a law firm. We are equipped to answer any questions that you have about trade secrets, non-solicitation & non-compete agreements.
What is the Goal of a Non-Compete Agreement?
A non-compete agreement can prevent one of your workers from leaving your business and immediately joining up with a competing business. It can also prevent them from creating their own business that would directly compete with you.
This makes sense from a company’s point of view. Training an employee and teaching them the ins and outs of a business can take a lot of time and money. No one wants to invest in an employee, only to have them turn around and join a competing firm. Such an agreement can also help a company protect any trade secrets, the things that set it apart from other competing businesses.
A non-compete agreement cannot last forever though. Generally, they can only cover a period of time lasting six months to a year after the employee left the company. Whether the employee left on their own or was terminated does not usually affect this length of time. An agreement also usually needs to have a geographical component. For example, a company in New York can make someone sign an agreement, but if that former employee moves to a completely different geographic market where the company does not compete they should be free to get a job in their field despite the non-compete agreement.
How Can I Ensure that a Non-Compete Agreement is Legally Binding?
If you are going to craft a non-compete agreement, you need to make sure that it meets state law requirements. Otherwise, it is going to just be unenforceable.
There are a few requirements that a non-compete agreement must meet in New York. It must:
- Be necessary to protect the employer’s interests
- Not be harmful to the public
- Not create an undue hardship for the employee
- Be limited in scope
That last part refers to the time it lasts and its geographic scope, which we already mentioned. If an agreement does not meet these standards, you could end up with a completely unenforceable document that does not protect your company at all.
Contact Our Law Firm Today
If you need to draft a non-compete agreement or a similar document, make sure that it is done right the first time. Contact David A. Gallo & Associates, LLP and learn more about how we can help you craft legally binding agreements that can protect you, your employees, and your company. Schedule a consultation today.