December4 , 2022

The Importance of Signing a Non-Compete Agreement with an Employer?

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In many companies, the employee is asked to sign a non-compete agreement in which he agrees not to start a competing business or work for the competitor for a certain period of time after he leaves the company. This type of agreement is beneficial for employers because employees will not share vital information with competitors such as workflow, product details and trade secrets. To draft these agreements, Charlotte non-competition lawyers need to be hired, who are well-versed with the corporate laws. 

Facts about non-compete agreements

It is easy to figure out why employers want their employees to sign this agreement. They want to limit the competition in the market, which may hamper their business. This agreement not only restricts the current employees but also the former employees of the company because they will not be able to share the details pertaining to the business with anyone else outside the company. 

It is also worth noting that not all states allow such agreements because they may limit the living of the employees. Therefore, it is strongly recommended to check whether your state allows non-compete agreements. The best way to do so is to get in touch with an attorney because he knows the state laws in better way. Even if those states that enforce these laws make sure that the time limit is not too long and does not have too many limits.

Factors affecting the non-compete agreement

It is vital to understand several factors affecting non-compete agreements as mentioned below: 

Time limit- The court will find an agreement reasonable if the time limit is shorter. There is no limit set by the law. The agreement, which lasts for a year or two, is considered more appropriate than the ones that last more than two years.

Location– The agreement sounds more genuine if it covers certain areas, which can affect the business of the employer. Majorly, the location or area depends on how large the business is along with the nature of the business.

Competitors- It is also vital to understand who will be the competitor of a business. There should be a short list of direct competitors with whom the employment of existing or former employees may be restricted. 

The employer needs to understand and follow all guidelines pertaining to drafting a non-compete agreement so that it should sound genuine and reasonable. A good lawyer will help you in doing so.