Non-Compete Agreements

Entrepreneurs invest immeasurable time and effort into developing their products and strategies. Someone who works for your company in a decision-making position will become privy to the thought processes involved in the company’s plans as well as their implementation. It would not be fair if an employee got to know your company’s proprietary information while working for you and then used it against you after they left your company. Former employees setting up their own businesses, to compete with their former employers, are a frequent cause of business disputes, as are former employees informing their new employers of confidential information they learned at their previous jobs. Non-compete agreements can prevent some of these problems, but you must tread carefully to ensure that your non-compete agreement is legally enforceable. The Gwinnett County corporate law attorneys at Zimmerman & Associates can help you draft an airtight non-compete agreement, or resolve disputes arising from an existing non-compete agreement.

How Non-Compete Agreements Can Protect Your Business Interests

When a business signs a non-compete agreement with an employee, the employee promises not to use the confidential information that they learned while working with the employer in a way that competes unfairly with the employer. Employers can ask employees to sign non-compete agreements at any point during the employment relationship, but the most common scenario is for the employee to sign a non-compete agreement when they start working for the employer. In fact, non-compete clauses are part of many employment contracts.

In a non-compete contract, you can prohibit an employee from starting a new business that directly competes with yours (meaning that it is in the same geographic area and provides the same kinds of products or services) within a certain time period of ceasing their employment with you. The non-compete agreement can also require the employee to return any computers or other devices that belong to the employer at the end of the employment period or to delete any software, files, or contacts related to the job from the employee’s own devices. The best non-compete agreements are the ones that are the most specific about timeframe, geographic area, and the exact activities that the former employee is not allowed to do.

Do Not Go Overboard with Non-Compete Agreements

President Biden issued an executive order in 2021 aiming to curb the excessive use of non-compete contracts by employers. Almost a third of employment contracts currently in force contain non-compete clauses, including one fifth of employment contracts for employees who lack a bachelor’s degree. The executive order gives the Federal Trade Commission wide-ranging authority to impose penalties on employers who violate workers’ rights by making their employment contingent on signing a highly restrictive non-compete agreement.

Atlanta Non-Compete Lawyer

If not done right, non-compete agreements have the potential to cause more problems than they prevent. Zimmerman & Associates is a corporate law firm in Norcross, Georgia with experience in preventing and resolving business disputes. Contact Zimmerman & Associates to help you get the most out of a new or existing non-compete agreement.