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Should you have employees sign a non-compete agreement?

On Behalf of | Jan 12, 2022 | Uncategorized

As a business owner, there are several issues you need to take into consideration, especially when first starting. One of these has to do with hiring and firing employees.

Employees are the backbone of your business. You want to keep them happy, yet when it comes time for you to part ways, you want it done amicably. You may want to consider the danger a former employee may pose if working for a competitor. Understand the basics of a non-compete agreement so you can decide if it is beneficial.

What is a non-compete?

When you have a business that includes proprietary secrets, you likely do not want those broadcast. Doing so may harm your business. When employees have access to sensitive information, a non-compete limits them to who they can work for should they leave the company. Not every employee may sign a non-compete agreement. A new law in Nevada recently banned their use with hourly workers.

What goes into a non-compete?

The non-compete places limitations on former workers. The details of the non-compete may vary, but in general, they address:

  • The professions an employee may work within
  • Specific companies operating within a certain mile radius
  • The timeframe that the non-compete is effective

An employee who signs this type of agreement should understand the implications before doing so. You should also insist on the contract before hiring someone, so it is a condition of employment.

Keeping your proprietary business practices from falling into the hands of a competitor is critical. As such, you may want to utilize a non-compete agreement for those sensitive jobs that may require more discretion.