How do you draft a non-compete?

Drafting an Enforceable Noncompete Agreement

  1. What is a noncompete agreement?
  2. Keep the group small.
  3. Keep the restrictions reasonable and narrow.
  4. Provide consideration for the agreement.
  5. Get it in writing.
  6. Prepare multiple versions if necessary.
  7. Concede choice of law/forum.
  8. Provisions to include.

What is a non-compete letter?

A noncompete agreement is a contract between an employee and an employer in which the employee agrees not to enter into competition with the employer during or after employment. These legal contracts prevent employees from entering into markets or professions considered to be in direct competition with the employer.

How do non-competes work?

A non-compete clause, also known as a non-competition clause, is a section of an employment contract that prevents an employee from working for a competitor or starting a competing business. It applies during the employment relationship or for a certain period after the employer and employee part ways.

What is a reasonable distance in non-compete agreement?

Most non-compete contracts prohibit competitive activity by the ex-employee within a certain number of miles of the employer’s business. The typical language prohibits competitive activity within a 15 to 25 mile radius of the employer’s business.

What are the elements of a non-compete agreement?

Duration. The duration of a non-compete agreement typically ranges from six months to two years (or less).

  • Scope. The employer must indicate the specific work or activities that they are restricting the employee from doing.
  • Geography.
  • Compensation.
  • Competition.

    • Do you really need a non-compete agreement?

    When trade secrets really are a concern, using non-compete agreements may be valuable. Think partners, executives and other key personnel who can take customers and resources with them. However, for lower-level associates who don’t have trade secrets, non-compete agreements may not be worth the trouble.

    How legally binding is a non compete agreement?

    The non-compete agreement lays out binding terms and conditions about the employee’s ability to work in the same industry and with competing organizations upon employment termination from the current employer.

    What is the normal duration of a non compete agreement?

    There’s really no “usual” time period but a 1 to 2 year period would generally be reasonable. In addition, depending on the area of coverage, it is important to specify exactly what geographical area the non compete agreement includes. Generally it would be something like 25-50 miles in radius but, once again, it depends on the business.