4 reasons your business should require noncompete agreements
On behalf of Law Office of Clifford J. Hunt, P.A. posted in business formation and planning on Wednesday, January 9, 2019.
Understandably, many employers are hesitant to require employees to sign noncompete agreements. Some employers think that noncompete agreements are unnecessary in their market and will waste the business’s time and money to create. However, as many companies have learned, your business might only be as strong as your noncompete agreement.
As an employer, you should ask yourself the following questions:
- Do your employees have access to confidential company information?
- Do your employees have close relationships with customers?
- Are there other businesses in your area that are in the same market as you
If so, a noncompete agreement might be in your best interest.
There are several reasons businesses have found it valuable to require employees to sign a noncompete agreement. Four of the most common reasons include:
1. Protecting confidential information: The most common reason that businesses require employees to sign a noncompete agreement is to protect trade secrets and other confidential information from being shared with competitors when an employee leaves.
2. Retaining customers: Businesses depend on their customers. Noncompete agreements can help prevent an employee from taking customers and clients to another competitor when they leave.
3. Saving business resources: It takes a lot of time and money to train a new employee, and you should consider your employees as investments. Noncompete agreements will help save your company resources by preventing your competitors from hiring your employees after you have recently trained them in.
4. Preparing for future litigation: Unfortunately, employers know that lawsuits can arise when an employee leaves a business. Noncompete agreements can help you protect your business in litigation proceedings and might even help prevent lawsuits from occurring at all.
If you are considering a noncompete agreement at your business or you have questions about a current noncompete, consult with an experienced business law attorney to discuss noncompete agreement laws in Florida.