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Non-compete agreements and enforceability

| Nov 19, 2016 | Employment Litigation |

Employers need to ensure their company information will be safe from competing interests. If an employee takes information learned at a job and applies it somewhere else, the company can be at risk for losing its proprietary information.

In these cases, employers may want to consider a non-compete agreement with an employee. In a non-compete agreement, an employer requires the employee to give up other employment opportunities if the employment ends. In general, this agreement prevents the employee from working in a similar field for a period of time.

Because employees are giving up certain rights by signing a non-compete agreement, courts are harsh in judging these agreements. Therefore, companies must ensure that their non-compete agreements are enforceable.

In order to be enforceable, a non-compete agreement must meet several qualifications. First, the business must have good business reasons for making its employee sign non-compete agreement. Often, these are necessary to protect intellectual property rights.

Second, to be enforceable, the non-compete agreement must include some benefit for the employee. Therefore, it is very difficult for a current employee to sign and enforceable non-compete agreement. Generally, it must be a new employee who is receiving some benefit as a result of the agreement.

Finally, the non-compete agreement must be reasonable to be enforceable. This means that it must contain reasonable limitations on where the employee can work, for how long the non-compete agreement runs and the types of businesses that the employee is prohibited from working in.

Like any contract, a non-compete agreement can be extremely important to New York business. By speaking with an attorney, companies can create enforceable agreement and understand their legal rights.

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