Hiring the right employee is often a long, tedious process. When you have sorted through hundreds of resumes, sat through dozens of interviews and finally extended an offer, you still may have weeks or months of training before your new hire begins to offer any real value to your company.
It is important for you to protect that investment of time and resources, so you require new employees to sign a contract that includes a noncompete clause. However, if that valued employee leaves to work for or start a competing enterprise, how much power does your noncompete agreement carry?
A solid noncompete
By signing the clause in his or her contract, your employee understands that you can take legal action if the employee goes to work for one of your competitors. Nevertheless, former employees break these agreements regularly, and the courts are not always eager to back the employer who files a complaint. Because noncompete agreements are out of favor with civil courts, it is important for yours to be carefully constructed, avoiding the common downfalls that make such contracts unenforceable, including the following:
- The duration of the restrictions on your former employee should last no longer than it takes you to complete the hiring process and train the worker's replacement. This reduces the opportunity for the former employee to lure your clients away while you seek a replacement.
- The geographic restrictions on your contract must be reasonable. A court may not uphold a noncompete that forbids an employer from working in the entire Southwest if your company operates mainly in the Houston, Texas, area.
- The job description for which you restrict your employee from seeking work must be as specific as possible. A court will not approve a noncompete that forbids your former employee from making a living in his or her chosen field.
- The restraints you place on your employee must be appropriate for protecting your company's interests. Excessive restrictions or those that create a hardship for your former employee may be unenforceable in the eyes of the court.
It is possible to draft and enforce a noncompete agreement that will protect your company's interests and success, but each situation has its own variables. If you have an employee who is placing your business at risk after breaching a noncompete agreement, you may benefit from the assistance of an attorney who has a history of success advocating for business owners in your circumstances.