What is the Difference Between an NDA and a Non-Compete?
A non-disclosure agreement prohibits you from revealing confidential information about your work during or after your term of employment, whereas a non-compete agreement places restrictions on the employment you may seek in the first year or two after your current job ends.
Financial uncertainty aside, quitting your job brings a sense of relief because your boss can no longer boss you around. If your employer is especially meddlesome, even corporate layoffs can be a relief if they mean no more waking up to urgent work emails and no phone calls from irate supervisors during your drive home. The trouble is that there are some situations where your employer can continue to tell you what to do, or more specifically, what not to do, after your employment ends. These restrictions will never take you by surprise because you must agree to them in writing for them to go into effect. Non-disclosure agreements (NDAs) and non-compete agreements are common in the business world, but that does not mean that they are always legally enforceable or that they are always fair to both parties. The Norcross, Georgia, corporate law attorneys at Zimmerman & Associates can answer your questions about NDAs and non-compete agreements.
Agreements That Limit the Activities of Former Employees
Civil law allows individuals and businesses to agree to almost anything, as long as the provisions of the agreement do not require the parties to break the law (so you cannot sign a lease agreement for your neighbor’s meth lab) and do not put one party at such a financial disadvantage as to be unconscionable (so you cannot sign an agreement that your neighbor must pay you 90 percent of his income as protection money). Below are a few types of agreements that govern current business relationships and those that have recently been dissolved:
- Non-disclosure agreement – The parties agree not to discuss information they have learned about each other’s companies with outside parties. These agreements can apply to current employees and to companies that wish to do business together but have yet to establish a formal business relationship. Their purpose is to protect trade secrets and other commercially advantageous information and ideas that may or may not otherwise be protected by intellectual property rights.
- Non-compete agreement – This agreement specifies that after an employee’s job ends, the employee will not set up a business that competes directly with the former employer or accept employment with a direct competitor of the former employer. These agreements must include reasonable time, scope and geography limits, or else they amount to “you’ll never work in this town again” agreements. The FTC has the right to penalize companies that pressure employees to sign overly restrictive non-compete agreements.
- Non-solicitation agreements – These agreements require the former employee to promise not to solicit business from clients of the former employer after the employment relationship ends.
- Non-circumvention agreements – Businesses that agree to pursue certain opportunities together and to share the proceeds of them if they become successful sign an agreement promising not to exclude each other from the agreed upon share of the proceeds.
Contact Zimmerman & Associates About Non-Disclosure and Non-Compete Agreements in Georgia
An Atlanta corporate attorney can help you draft non-disclosure agreements and other business contracts. Contact Zimmerman & Associates in Norcross, Georgia, to set up a consultation.