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<< Back to FAQ/Fact list Q: We have received recent advice to have all of our employees sign a non-compete agreement. What do you think about this idea? A: Non-compete agreements can be a very useful tool for an organization in the right circumstances. Non-compete agreements should not be used for all positions in all industries. The courts frown upon a condition which limits a person’s right to earn a living. Therefore, a number of factors should be considered. Non-competes should only be used for industries and in positions where the employee has enough information and access to proprietary information to damage an employer financially if they left and worked for the competition. Examples of this might be a research and development position for a software manufacturer. Such an example generally does not cover such positions as receptionist, assembly worker or a sales person in a retail electronics shop. Also, non-competes should have a time limit, such as two years, and a geographical area, such as within 50 miles (although this may change with the use of telecommuting). Some state courts do not view non-competes as favorably as others. We advise that an employer seek legal review of a non-compete agreement prior to implementation. |