Naperville Business Lawyer Raises Questions About the Enforceability of Non-Compete Agreements

non-compete agreements, Naperville business lawyerWhen you own and operate your own business, you want to protect your investment to the fullest extent possible. You purchase insurance policies to guard against physical damages as well as certain potential lawsuits. You develop workplace safety protocols to prevent on-the-job injuries to your employees. Finally, you may look to protect your company’s interests through the use of non-competition agreements, also called non-competes.

With over 40 years of experience in the practice of business law, I understand the intentions behind asking your employees to sign non-compete agreements. You do not want a disgruntled worker to take inside information about your business and your strategies to a competitor. It is important, however, to keep in mind that if you want a non-compete that is actually enforceable, it must be fair, reasonable, and very specific.

Reasonable, Specific Terms

A non-compete agreement typically limits an employee from working for one of your competitors while employed with your company and for a specific period of time after terminating employment with your company. The period of time specified in your non-compete must be appropriate to your industry without being unduly limiting for a former employee.

Similarly, your non-compete agreement must be very specific in terms of geographical restrictions. This, again, will depend on the nature of your industry. For example, if your business is located in northern Chicago, drawing its customer base primarily from the same area, a non-compete which prevents an employee for working within the same industry but on the city’s south side may be overly restrictive.

Limit Who Needs a Non-Compete

If you believe that non-compete agreements are necessary, you should only require them for appropriate employees with access to information that could be damaging in the hands of a competitor. This issue recently made headlines when Illinois Attorney General Lisa Madigan file a lawsuit against sandwich company Jimmy Johns for forcing frontline sandwich makers to sign non-compete agreements. Eventually, state lawmakers stepped in with new legislation set to take effect on January 1 which effectively bans non-compete agreements for workers making less than $13.00 per hour.

Scare Tactics

Many employers ask their employees to sign non-compete agreements that have virtually no chance of standing up to a legal challenge. Such employers generally rely on a worker’s ignorance of the law and fear of violating a contract, even though the contract would likely be unenforceable. If you are going to take the time to draft a non-compete agreement, you should make sure that you are using it properly and are prepared to take the steps necessary in enforcing it.

For answers to your questions regarding non-compete agreements or for help with developing one, contact an experienced business contract attorney in Naperville. Call The Gierach Law Firm at 630-756-1160 for a confidential consultation today.

 

Sources:

Entrepreneur

Forbes

Cook County Record