What is a non-compete agreement?

When forming your business and setting up all its aspects, you may have certain secrets or things you wish not to be shared outside the company. These things usually play an important role in the operation of your business and may give you a competitive edge. However, once you begin hiring employees, these secrets are at risk of being exposed when an employee leaves. Even more of a concern is if the employee leaves to work for a competitor. Luckily, you are able to protect your business somewhat through using a non-compete agreement with the help of a business formation attorney.

PBS explains the agreement is signed by employees as part of the hiring process and prohibits them from leaving your company to work for a competitor. They also can prevent the employee from sharing information gained through employment with your company, such as secrets, operation tactics, client information or anything else they learned through training and working at your company.

These agreements may also be called a confidentiality agreement. You can set one up legally with the help of an attorney to make sure it covers everything you need it to. As a condition of employment, your employees must sign it. It can give you peace of mind that company information will not leave the company.

In the event an employee breaks the agreement, you at least will have legal recourse to recoup damages. However, the court may or may not rule in your favor. So, a non-compete agreement may not always hold extreme power, but it is at least one step you can take to protect your business. This information is for education and is not legal advice.

 

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