How to Create a Non Compete Agreement

Non compete agreements can be very useful for owners who work with confidential information or for client based businesses. They can protect the confidentiality of trade secrets as well as keep your employees from leaving and taking your clients or other employees with them. Read below for 4 tips on how to write a non compete agreement.

Difficulty: Moderately Challenging

Instructions

1. Begin by creating a non solicitation clause that would prohibit your employee from contacting or soliciting business from existing customers. This clause should also prohibit the solicitation of current employees. (While it may hurt to lose a star employee, it hurts even worse when they take 3-4 other employees with them.)

2. Next include a clause that prohibits competition within a specified geographical area (such as the city or state you live in) within a specified time period (usually 6 months to 2 year.) Please note: A non compete agreement can be difficult to enforce if you do not narrow the geographical region or if you list too lengthy a scope of time.

3. If your company deals with confidential information or trade secrets, make sure to include a non disclosure agreement. A non disclosure agreement will prevent your employees from sharing “secret” information with other interested parties.

4. Finally, don’t forget to offer an incentive for you employee to sign a non compete agreement. They should receive some form of compensation such as a job offer or promotion. This will enhance the enforceability of your non compete agreement.

[leduncan]

on 8/17/2009 Non-compete agreements are important in business. Very good article!