If you are a business in North Carolina that values your hard work and wants to protect it from your competitors, you may opt to have new employees sign a non-competition agreement when they come to work for you. These contracts are often for a specific period and begin when the relationship with your employee has ended.
FindLaw states that non-competition agreements may be used for a long list of things, including goodwill or protection of trade secrets. These agreements are often heavily scrutinized in the court system when in a legal battle because it may place limitations on the employee when they are trying to make a living. For this reason, it is important that these contracts are reasonable and understood by both employer and employee.
Non-competition agreements are considered valid when they meet the following requirements:
- Are reasonable in geography, time and scope.
• Protect the employer’s legitimate business interests.
• Are supported at the time it is signed by valid consideration.
Valid consideration means that because the employee refrains from helping the competition, they receive something of value. This could simply be the job the person is applying for if they sign the contract before employment. If a non-compete is signed after employment has begun, the guarantee of the job is not considered valuable enough for the employee to promise not to compete. Employees may be offered additional benefits or a promotion in exchange for signing the contract.
If a non-competition agreement is too broad in duration or scope, it may not hold up in court. The reasonability of the contract is different for each case, which is why it may be beneficial to have an attorney handle these important agreements.
