Non-Compete Agreements for your business should be drafted by attorneys so they meet particular company needs, conform to relevant state laws, and are deemed enforceable.

Under a Non-Compete Agreement, an employee agrees not to compete with the employer after employment ends. Confidentiality covenants are generally also included in such agreements. In enforcing such agreements, courts must balance the need to protect its interests with the employee’s need to make a living. Therefore, the documents must be very carefully drafted to ensure enforceability.

There are a few issues to consider when implementing non-compete agreements

Competition

Competition must be carefully defined. In general, the more narrowly this term is defined the more likely it will be able to be enforced. If you define competition as companies in any field related to your industry, you will be too broad in your definition and have difficulty enforcing after an employment split.

Customers

Customers or a specific type of customer must be clearly defined if customer relationships are to be protected.

Goodwill

The good relationship an employee or company has with a customer is an asset that belongs to the company. However, courts closely examine the nature of the employee’s responsibilities and relationship with customers to determine whether goodwill is threatened.

Limit Your Non-Compete Agreement to Key Employees

Key employees with significant responsibilities and/or regular customer contacts are more likely to be restrained from competing. Non-competes for lower level employees are hard to justify.

Confidential Information Must Be Clearly Defined and Identified

The only information that may be protected is confidential information. Courts consider the importance of the information to the business, if the information is otherwise available to third parties, and what restrictions were implemented to prevent its disclosure. Be careful not to be over-inclusive in your definitions of what you consider to be confidential.

Start from the Beginning

Non-compete agreements must be supported by consideration. In other words, employers must give something to the employee in exchange for his/her promise not to compete. Hiring an applicant generally, provides the necessary condition.

After employment has begun, additional consideration may be required, such as a signing bonus, a promotion, or a pay increase. However, such agreements are stronger and more easily enforced if signed at the start of employment.

Agreements

Agreements must be negotiated in good faith and be restricted in time and location. These concerns are particularly important in today’s high-tech environment where information becomes obsolete quickly and markets change daily. In some industries, one year can equate to several generations or an eternity.

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When hiring foreign workers, you’ll need permission from government agencies and may want to have them sign a non-compete agreement. Employers have to ask for certification first from the Department of Labor. A work visa issuance is not guaranteed by approval from the Department of Labor.

Once their application is approved, the employer must require a work visa for the employee from the U.S. Citizen and Immigration Services. Job applicants must also prove under the provisions of INA that they are admissible to the U.S.

The various foreign labor certification programs have the role to ensure that hiring foreign workers in the U.S. on a temporary or permanent basis is not going to affect negatively the wages, job opportunities, and working conditions of American workers.

One of the issues you may face as an employer of foreign workers is related to the non-compete agreements. For some companies, the non-compete agreements are necessary in order to ensure that the business doesn’t lose confidential information and trade secrets to competitors.

What is a Non-Compete Agreement Exactly?
Non-compete agreements are contractual agreements signed between a client and independent contractor or an employer and employee. They have the role to limit for a duration of time the worker’s ability after leaving his or her current job to work for a competitor.

These agreements are not only to be found between American companies and foreign workers. They also can be necessary in the case of hiring American workers. However, in order to protect trade secrets, they might be even more necessary in the case of hiring foreign workers.

How Are They Enforced?
The enforceability of a non-compete agreement depends on what state it is being applied and how it is worded. In some states courts broadly enforce non-competes agreements, while others require more narrowly tailored agreements. California and several other states do not enforce non-competes agreements in most cases.

Should I Use One?
As an employer, it is not always a good idea to require your foreign worker employees to sign a non-compete agreement. Sometimes, these agreements may have the potential to scare away any good candidates for your open position since talented people may prefer to want to keep open their options.

In case that you are considering having your foreign worker employees sign a non-compete agreement, you need to be very clear on what specifically are you worried about. This way you can better tailor your agreement so that it isn’t overly broad but addresses your concerns.

A well designed non-compete agreement has greater chances that your non-compete agreement could be enforceable in most jurisdictions. Generally, such an agreement should be reasonable in duration, scope, and its geographic reach.

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