As an employer, it is only natural that you want to retain your most talented workers. You don’t want your best employees to take their talent and everything they know to a business competitor.
As this is a concern for many employers, it is not unusual for employers to incorporate non-compete clauses into employment contracts with their employees. Non-compete contracts are designed to restrict the employee’s ability to work for a competitor for a certain amount of time after leaving the company. Non-compete clauses in employment contracts are essentially meant to protect your business and prevent workers from taking business from your company and diverting it to a competitor.
Non-compete contracts generally cannot be used to prevent a former employee from seeking any employment with a competitor altogether. For instance, if the former employee was a sales person at your company, but then leaves your company to join one of your competitors in a different capacity, such as a procurement manager, it is likely that a non-compete contract you hold with that former employee would apply to that former employee’s new job at your competitor (assuming that the former employee’s new job duties differ substantially from his or her job duties when the former employee was in your service).
How Can An Employer Make Sure A Non-Compete is Enforceable?
North Carolina allows for employers to use non-compete contracts with their employees, but these non-compete contracts must be enforceable – just like any other contract or agreement. For starters, the non-compete contract must be a valid contract, which means that the non-compete contract must be in writing and made as part of the employee’s employment contract and must be designed to protect legitimate business interests of the employer.
The non-compete contract must be reasonable in terms of how long the non-compete contract will be effective, and must be reasonably limited in terms of geographical territory. For instance, preventing a former employee from working anywhere in the entire state of North Carolina would likely be too broad in terms of geographical territory if your business is not operated state wide.
The employee must get some sort of valuable consideration in exchange for agreeing to the non-compete contract. This means that the employee must receive something from the employer, such as initial employment, as in the case of a new hire. If the employee has been with the company for a while and the employer decides to have the employee sign a non-compete contract, the employee must be given some other sort of valuable consideration, such as a bonus or other monetary compensation in exchange for their agreeing to the non-compete contract.
Need Help Enforcing a Non-Compete? Contact A North Raleigh Business Attorney
Using non-compete agreements with your key employees is just one of the many ways that you can protect your company from your competitors. If you need assistance drafting, reviewing or enforcing a non-compete employment agreement, contact me, a Raleigh Business Attorney with over 20 years of experience to review your case.
North Raleigh Law is located in Raleigh, North Carolina, and serves clients throughout the Triangle Area in Wake County, Durham County, Orange County, Chatham County, Vance County and Franklin County, including Raleigh, Durham, Chapel Hill, Zebulon, Wake Forest, Fuquay, Cary, Clayton, Henderson, Oxford, Pittsboro, Apex and Holly Springs.