Nevertheless, it is possible to write an agreement that the court is likely to uphold. The American Bar Association offers the following best practices for writing enforceable non-competes.

1. Acquire necessary signatures

A non-compete should be a binding contract between you and your workers. Therefore, you should not only obtain employee signatures, but you should also sign the agreement yourself.

2. Provide adequate consideration

When you impose restrictions or limitations on employees’ activities, you need to offer them something of value in return. The legal term for this is a consideration. If you are asking a new employee to sign a non-compete agreement, the job offer itself is sufficient consideration. However, you must offer existing workers something more, such as a special bonus, stock grant or promotion.

3. Limit the scope of the restrictions

The court will make a determination as to whether the restrictions that you have imposed on your employees are reasonable. The broader the terms of your non-compete agreement, the more likely the court will be to reject it. Limit its scope to a specific geographic area, such as a particular city or state, and impose a reasonable time limitation, such as one year.

4. Do not involve all employees

If you ask all employees to sign a non-compete agreement, the court may find that this unreasonably imposes an undue hardship on some of them. Only require it of employees with access to sensitive information. 

These tips will not guarantee that the court will uphold your non-compete agreement. However, they may improve your chances of enforcing it successfully. 

Meynardie & Nanney

The post How can you write an enforceable non-compete agreement? appeared first on NC Business Lawyer.

The concept of non-compete agreements makes a lot of sense from the business perspective. A person’s employment after leaving a specific company may be restricted in order to protect the interests of the first company. The restrictions placed on employees generally include a geographical range, a time duration and potentially even a scope of work. 

According to Forbes, a good non-compete agreement includes some elements similar to that of a nondisclosure agreement in that the contract should safeguard company sensitive information from being shared externally. Such information subject to protection may include sales and marketing strategies, product development or design information, financial data and more. 

The ability to enforce a non-compete agreement may be influenced by a variety of factors, including the level of reasonableness attributed to the original agreement. An agreement designed to last five years, for example, may not be considered reasonable whereas a contract spanning 12 months may be. Companies should be judicious about which employees they require to sign non-compete agreements as well. Persons working in capacities where they have regular access to critical information should be the target for these types of contracts. 

Meynardie & Nanney

The post Non-compete agreement basics appeared first on NC Business Lawyer.

North Carolina does favor the employee if you write a noncompete clause that overly restricts him or her from getting another job. Across the country, there has been a trend toward making noncompete clauses more restrictive for the employer. Here are some ways to make it more likely your noncompete clause will hold up in court.

Make it part of the original employment agreement

Employers sometimes do not think about asking their employees to sign a noncompete agreement until after hiring them. Once you hire someone, you cannot add a noncompete clause or other significant terms in your favor without providing additional consideration. This could be additional benefits, a bonus or a raise. Simply making it a condition of continued employment will not work.

Make it for a reasonable time and geography

North Carolina law does not stipulate how long a noncompete clause can last or how broad it can be geographically. A business law attorney can guide you through the process of writing a noncompete clause which is reasonable for the length of time and for the geography you need to protect your business.

For example, if you do business only in Charlotte, North Carolina, your agreement should not cover Greensboro, Raleigh or other cities. A court might find that this agreement was unreasonable in your case. However, if your employee sold all over the state, a court might find that a state-wide agreement was reasonable.

Make it cover similar employment

You should not try to bar an employee from engaging in any kind of sales. You should write a noncompete clause that protects you from him or her engaging in sales of a competitive product.

Do not leave out a noncompete clause or write one carelessly because you assume it is not enforceable. Write a reasonable noncompete clause that can protect you if an employee goes into competition against you.

Meynardie & Nanney

The post When a noncompete clause is enforceable appeared first on NC Business Lawyer.