Important Clauses in Non Compete Agreements

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If you're thinking of bringing a new person into your company, one of the things you may have considered is whether you need a non compete agreement for them. If you do, it's often easier to use a non compete agreement template, so you can just fill in the blanks and feel secure with the wording and legal language. Here's what you'll want to consider about this type of template.

Table of Contents

A non compete agreement template is different from other types of contracts, since it's not a contract for something. Instead, it's a contract that says the employee won't do something. To better understand how that works, we'll cover:

  • Important Non Compete Agreement Clauses
  • Best Practices for Using a Non Compete Agreement
  • Some Tips for Making Sure Your Non Compete is Secure
  • Key Considerations for a Non Compete Agreement
  • Non Compete Agreement Sources of Information

In a non compete agreement, you need to make sure you're protecting your company's intellectual property. You also want to make sure you're preventing an employee from "stealing" clients away from your company when/if they leave. But you can't restrict everything they do, and you have to be sure you're following the law. That's why the right clauses are so important.

  1. The Employee's Role -- Spell out what the employee does at your company.
  2. The Type of Restrictions -- Any restrictions placed on them need to be clear and specific, to avoid accidental violation.
  3. The Time Frame for Restrictions -- Most non compete agreements last for a couple of years after the employee leaves the company.
  4. The Penalties for Violation -- Violating a non compete can come with serious consequences, including fines and court costs.

When you carefully focus on the clauses in a non compete agreement template, you can be sure you've covered the important areas while still allowing your employee as much freedom as possible. Employees won't want to work for companies that try to restrict them too fully, and you could lose out on some great talent that way.

Best Practices for Your Non Compete Agreement

As you choose a non compete agreement template, remember that these templates all have the specific, basic legal language that's required by them. That protects you and your employee, as well as protecting your clients from a an employee who might try to "poach" them otherwise. To keep the non compete agreement as clear as possible, and keep it within the law, make sure to:

  • Keep the standard language that comes with the template.
  • Be clear on the details of the non compete.
  • Spell out the specifics, so there's no guesswork.
  • Be reasonable in the restrictions, so you don't chase off good talent.

Your employees need to know what to expect when working with your company, and your non compete agreement can be a big part of that.

Tips for a Secure Non Compete Agreement

To keep your non compete agreement as secure as possible, you'll want to send it electronically. You can use Nitro Sign to get your non compete and other important contracts signed. Not only is it fast and secure, but it's also a good way to have a record of your employee's signature, in case there's ever any question about its completion.

Key Considerations That Come With a Non Compete Agreement

Any company that's using a non compete agreement likely has a good reason to do that. Sometimes it's because of proprietary information, and sometimes it's due to trying to reduce the poaching of clients. When using a non compete agreement template, make sure you're considering:

  • Wording that's direct, in order to avoid legal issues and problems.
  • Attention to the details, and clarity about any specifics of the agreement.
  • A timeline for the non compete during employment and once the employee leaves the company.
  • Security for your business, and protection for your clients.

With a non compete agreement you can have good peace of mind, and so can your company's clients. Your employees will know where they stand, as well, so you don't have any confusion about what's allowed and what isn't.

Related Sources for Additional Information

If you want to know more about a non compete agreement template and when it should be used, there are resources to help you. Here are a couple of the best sources of additional information.

Common Mistakes With Non Compete Agreements
What Non Compete Agreements Involve

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