In the business world, contracts are a necessity. From hiring employees to making substantial business deals, legal agreements ensure that those involved know what to expect from the arrangement. These contracts can also help business owners protect their companies from negative outside influence in certain capacities, such as creating noncompete agreements so former employees cannot take company knowledge to direct competitors.
Though noncompete agreements and clauses can have benefits, they are somewhat tricky to get right. If an agreement does not follow North Carolina laws regarding this type of agreement or are too broad in scope, a court could find the agreement invalid if challenged. As a result, following the law down to the letter is critical.
In regard to scope, business owners and employers may want to look at the different ways they could prevent their workers from helping the competition or creating more competition in the future, such as:
- Restricting a worker’s ability to work for a direct competitor or in a particular industry for a specified amount of time and in a specified area
- Using a nondisclosure agreement that restricts a worker from disclosing company secrets or other confidential information to competitors
- Enforcing a no solicitation agreement that prevents employees from soliciting clients, customers or fellow employees from leaving the company to join a competitor
The limitations placed on an employee through noncompete agreements or other restrictive agreements must be reasonable. If a court deems the terms of the contract unreasonable or too broad in scope, an employee may be released from having to comply with the terms. As a result, North Carolina employers may want to ensure that they have the right legal assistance when drafting such important documents.