Page 3 - Rules of the Road-Non Compete Agreements

the protection of trade secrets and confidential information or protection of the

employer’s good will with its customers and prospective customers. So, for

example, a sales representative who has built up customer relationships over a

period of years very well might be ordered not to compete for a period of time in

order to protect your interest in the goodwill he or she has built up while working

for your company. In contrast, a back-office employee with no access to

confidential information or customer-facing responsibilities, however capable and

important an employee, likely would not be held to a non-compete agreement.

Second, non-compete agreements must also be supported by

“consideration.” This means the employee must receive something in exchange

for agreeing to the non-compete. You can ask a new employee to sign a non-

compete as a condition of being hired, but if you want an existing employee to sign

one, you should be prepared to connect that to something of value beyond simply

keeping their job: a raise, a promotion, or even a one-time bonus or stock offering

should be sufficient.

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