It’s true that non-compete agreements can make or break a business. These seemingly ordinary pieces of paper have a specific purpose. When used correctly, non-compete agreements can save your company from ruin by a former employee. Not sure what to think? Let’s break it down to basics.
Each business has a specific process that makes it successful. That process is particular to your business and yours alone. Let’s say that you, as a business owner, hire someone with a fantastic resume. He is absolutely perfect for the management job. In turn, you give him benefits, a raise, and say over essential functions of the business. He also learns that essential process you’ve worked hard to develop. What happens if he leaves and takes that information elsewhere?
Before you continue, please know that this article is not to be used in place of personalized legal advice or services. Every business is unique. Dowd Law specializes in business needs from startup to existing, and we can help you. Contact us for more information.
There are some serious rules to follow with non-compete agreements. First, it’s not a good idea to give one to everyone you employ. Second, you should never use a free form you found on the internet. Surprised? Confused? That’s why experts like us here at Dowd Law are your best legal resource. You should be running a business, not studying at law school.
Who Should Sign A Non-compete Agreement?
As an illustration, let’s go back to that manager you hired a minute ago. Namely, let’s look at his function. He is a manager that is privy to a lot of information in your company. That includes your trade secrets. Trade secrets are what make your business so successful. If those secrets were taken to a competitor as free information, that other business could provide cheaper services. Customers would likely leave. Your company could suffer. Knowing that, how well do you trust the man you just hired?
In short, employees who have access to sensitive business information need a non-compete agreement. That should include higher level managers at least. Aside from them, think about your other employees. If every employee has access to that information, you could have an issue. Non-compete agreements are meant to protect trade secrets. If every employee knows, then there is no secret to keep. At that point, even signed agreements may not protect you in court. As a solution, have a lawyer analyze your business and compose your binding documents.
Free Form Non-Compete Agreements
This is one of the worst mistakes business owners can make. Yet, it is so easy to do. Unfortunately, free form non-compete agreements can be downloaded off the internet. However, you have no way of knowing what type of business it was originally meant for. Worse, free documents may not even be composed by a lawyer. Your business deserves to be protected by every word on a legal document. As a rule, never use free legal documents floating on the internet.
For non-compete agreements, it is imperative that each clause protects your business. Never leave the legal aspects of your company to chance. Hire a law group that champions small businesses. Schedule a consultation with Dowd Law today.