![]() These companies want to prevent their competition from easily obtaining the benefits of their efforts by simply hiring away employees with critical knowledge of their operations. Many firms specialize in proprietary data and technology that took a great deal of effort and hard work to obtain, and this effort is the reason they enjoy their position in the marketplace. However, if monetary compensation is offered and accepted as part of the non-compete agreement, the courts can take a different outlook on the validity of the contract because the employee has been financially compensated not to start a business within a certain distance and time of leaving the company. Many states have concluded that non-compete agreements restrict free trade and have refused to enforce them. Non-compete agreements and clauses can be useful in deterring employees from directly competing against their parent company, but they are not always enforceable. As an example, a company could prevent an employee from setting up their own business within 25 miles of their location for one year. ![]() The non-compete agreement generally restricts an employee from setting up a similar business within a certain distance of the company and within a certain amount of time from the employee's separation from the company. Non-compete agreements can be stand alone, or they can be clauses that are inserted into a larger overall employment agreement. ![]() The non-compete agreement is utilized to prevent an employee from leaving a company and forming their own rival company in close proximity to and in direct competition with their former company. ![]()
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