As a business owner, there are critical pieces of your business that need daily attention. Each element drives your business towards success, and one misstep may cause your business to fail.
Your workforce is a crucial piece to your business plan. When employees feel valued, they often remain loyal. However, some situations may cause a member of your staff to leave the company and pursue an opportunity elsewhere. A non-compete agreement may keep your valuable business practices away from a competitor. Discover how to create a document that protects your interests when an employee leaves.
Defining the occupational restriction
The point of a non-compete agreement is to limit who an employee may work for immediately after leaving your company. The most common way to do this is to specify the industry for whom an exiting employee may not work. For example, if your business sells mattresses, a non-compete may restrict a former employee from selling mattresses, bedding or related products. This stops a person who may have sensitive information relating to the way you conduct business from taking that insight to a competitor for implementation in that business.
Drawing the geographic boundary
Another critical element of a non-compete is outlining the area in which the occupational restriction applies. It is unreasonable to ban an employee from ever seeking related work near his or her residence. However, it is acceptable to define the boundary. Some may do this by setting out a mileage restriction. For instance, your competitor may operate within a very tight area of your business. As such, you may restrict employees from working within a 30-mile radius of your business.
Finally, the limitation in a non-compete must have an end date. You cannot permanently forbid a former employee from gaining employment in the same industry. Thus, you must decide how long the restriction will last. In Georgia, one year is an acceptable timeframe.
The consequences of an exiting employee who disregards a valid non-compete vary. Getting assistance with creating a valid and legally binding agreement may ensure that it stands up to a legal challenge.