To Compete or Not to Compete? That Is the Question

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.

Posted on February 5, 2014 in Employee Issues

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“Can I get my employees to sign a non-compete?” I’m often asked. Unless you’ve thought through this special kind of legal provision carefully, they are often struck down.

A non-compete clause essentially prevents your worker from entering into a competing business or working for a competing business when he or she leaves your employ.  While that may seem fair to you–“why should I let my employee learn on my job and take all my stuff and go to another position?”–courts tend to have a different perspective.

Essentially, courts are concerned (especially with the job market nowadays) that workers will be unable to find other employment with a non-compete provision looming over their heads. And they are messy. If you’re going to insist that an employee sign a noncompete provision, you need to be prepared to enforce it. And when you’re hiring employees, the last thing you need is to get embroiled in litigation with this person’s prior employer. As Lauren Ellerman, Esq. points out in her blog: “Chances are if you are looking to hire someone with experience in any profession, they may come with a non-compete agreement.”

As a business owner, you’ll want to focus carefully on what your real concerns are. Is the concern that the employee will take your client list or poach sensitive information? There are other kinds of provisions you can include in your employment agreements or employment manuals that will protect against specific harms and stand a much better chance of being upheld in court.

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