Noncompetition agreements are important documents that businesses often execute with their employees to prevent their workers from sharing trade secrets or taking important trade practices into competitor organizations. When an Alaska business wishes to use noncompetition agreements with its employees, it should know just what and to what extent it can do to limit the employees’ ability to work for competitors in the industry. This post will speak generally to reasonableness in the drafting of noncompetition agreements, but no part of this book should be read as specific legal advice.
What can be included in noncompetition agreements?
There must be a reason that a business needs to impose a noncompetition agreement on an employee. Businesses may not arbitrarily require their employees to sign contracts that may limit their future work prospects or access to jobs. If there is a reason for a noncompetition agreement to be executed, a business must not impose too broad of restrictions on the worker.
This is where reasonableness becomes relevant. An employer may require the worker to avoid taking work with competitors for a year or other agreed upon length of time, but they may not bar a worker from ever working for a competitor. Doing so may be deemed unreasonable. Reasonableness must be assessed in terms of when, where, and what a worker is barred from doing after leaving their employer.
Getting noncompetition agreements right from the start
As readers can tell, a great deal of consideration must go into the terms and scope of noncompetition agreements. Employers may inadvertently create invalid contracts that will not be enforceable if their workers choose to leave their employment and seek opportunities with competitors. One way that a business can protect the validity of its noncompetition agreements is by seeking the guidance and representation of employment law attorneys in their communities. Lawyers who work in the employment law field and work for employers can help their clients devise valid and enforceable contracts that protect their interests and meet their needs.