Non compete agreements can help prevent employees from using trade secrets they learned from you to compete against your business. It would be unfair for you to spend time training employees and have them take your customers away from you.
This type of agreement generally prohibits employees from working in the same market or geographical area where your business operates for some time. Non compete clauses can also appear in employment contracts.
A non compete agreement is usually enforceable in many states as long as the document provisions are reasonable. Some states don't enforce non compete clauses, such as California, Oregon and Washington.
Courts analyze factors such as the type of activities prohibited, the geographical area mentioned, what type of propriety methods are involved and how long the agreement is good for.
Make sure the terms you choose are reasonable. Be specific about the activities and trade secrets that employees can't use. Keep in mind that trade secrets don't apply to skills that anyone can learn easily in your industry.
Keep the length of time relatively short, such as six months or a few years instead of decades. If your business only operates in a local market, only apply the terms to that area. Don't mention the whole state or the U.S. unless you operate nationally.
