Non-Compete Agreements – What Should You Include?

As a business owner, you want to staff your company with dedicated, talented employees who will work hard on your behalf, showing loyalty and dedication and acting as an integral part of the team.  An ideal employee works towards a shared goal with you and the rest of your staff and plans on remaining in your employ for many years. Unfortunately, that is not always the way that things work out, and staff members and management alike may make the decision to move on. Though you certainly don’t want to stifle anybody’s ability to earn a living, you still need to protect your trade secrets from competitors and do what you can to prevent employees from being poached. A non-compete agreement is often the best way to accomplish that goal, and the Philadelphia law firm of Bochetto & Lentz can help you create one that will include everything that you need.

Effective non-compete agreements not only provide protections for your companys’ intellectual property, but also makes sure that the time and resources that you invested in training does not benefit your competitors.  The challenge is in creating an agreement that does not keep employees from gaining meaningful, gainful employment after leaving you, so you need to be careful not to be too extreme in your wording or too limiting in your terms. It is possible to structure an agreement that provides you with the protections that you need while preventing competitors from attempting to poach your staff. The most important inclusions for your agreement include:

  • Non-solicitation terms that prevent employees from soliciting your client and customer base on behalf of a competitor, as well as to prevent departing employees from attempting to encourage current staff from following them to another employer
  • Confidentiality and non-disclosure terms that protect trade secrets that employees learn while in your employ. These terms will be specific to the kinds of information that is confidential and cannot be disclosed to a competitor or client. It is important to make sure that the information that is included in these terms is truly proprietary or it will be viewed as an overreach by the courts
  • Work-for-hire terms that make sure that you own the work that an employee generates while in your employ. Work-for-hire terms makes sure that the work that an employee does is not their property but the property of the company
  • Incentive compensation agreements, which provide specific compensation in exchange for remaining with the company for a specific amount of time. Some refer to these terms as golden handcuffs, which offer compensation in exchange for loyalty

In lieu of a non-compete agreement, companies can include specific prohibitions and protections against sharing proprietary information within the terms that are included in their employment manuals, which can specify such essentials as prohibitions against dispersing information through social media.

Non-compete agreements need to be carefully crafted in order to be upheld in a court of law. If you want information or help in this process, contact the Philadelphia law firm of Bochetto & Lentz for legal assistance.

Learn more about Non-Compete Agreements here: http://bochettoandlentz.com/practice-areas/Philadelphia-Contract-Attorney/

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