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Should I Have My Employees Sign a Noncompete Agreement?

Video Script Below

Should I have my employees sign a non-compete agreement? I’m Steve Kramer. I’m a Florida business and intellectual property attorney. This is one of those areas that intersects at both of those areas of law. And it’s a really great question: Should you have your employee sign that? Well, for the most part there’s not really good reasons to not have your employee sign. You know, your worst case scenario if you have your employees sign it is that it’s not enforceable or you have problems enforcing it later. But it serves some real good purposes for you. For one thing, it prevents your employees from taking clients, tools, knowledge or directly competing against you. And that has a lot of value because in a lot of businesses it’s not that hard for the employee to leave and set up their own shop and steal your clients. And that can be real bad for business. Now, if you do one, there are a few things that you make sure you include in your non-compete agreement. You’ve got to make sure you’re serving a legitimate business interest. I successfully defended a case once where the business interest was an illegal activity – at least that’s what I argued. And that presented a real problem for the employer. So as the employer you’ve got to make sure that you legitimately identify or you identify a legitimate business interest. The other thing you’ve got to do is narrowly identify the geographic area that’s covered and also be careful with the time frame that’s covered. Because if you don’t that could create some problems in enforcing this agreement against your employees. And if you’ve got a specialized industry there may be some specialized protections or other inclusions you can make in the agreement to give you some extra protection. All these things matter and then, of course, you’ve got to enforce it. If you don’t enforce it then it has no value. You know, frequently by enforcing against one employee you can make it clear to everybody else in your office that this isn’t just a piece of paper. This is a philosophy and this is something we’re going to stick with. I’m telling you this because I’ve seen businesses crippled over and over again because employees leave with clients, because they engage in direct competition, because they basically engage in unfair competition with their former employer and you need to be aware of that because you worked hard to build your business and we want to protect your business. So if you have questions about this or anything else, give me a call. This is what we do. That’s why we’re one firm for life. We’re here to protect your business through its entire life cycle. Thanks for watching, I’m Steve Kramer.

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