Thursday, June 23, 2016

Non-Compete Agreements: A Complete Overview

Contracts are your business' biggest safety net: they protect your interests, your trade secrets, your responsibilities, and countless other important factors. The exact type of contracts you need may vary slightly depending on your industry, but there are several basic contracts that can benefit practically every type of business. We explored a few of them in our previous blog titled 5 Example Contracts Your Business May Need. This week, our Lake of the Ozarks law firm is here to delve a little bit deeper into one of these specific contracts: non-compete agreements.


What Is A Non-Compete Agreement?

A non-compete agreement is a contract some employers ask their new hires to sign before beginning work. Though they are often signed at the same time, non-compete agreements are distinct from confidentiality agreements and it is important to understand the distinction between the two. Confidentiality agreements ensure that employees will not reveal the company's private methods, client list, or other sensitive information to outside sources. Non-compete agreements ensure that employees do not compete with the company for a certain period of time and in a specific geographic area.

How Does A Non-Compete Agreement Work?

Non-compete agreements are designed to protect the company's interests by preventing the employee from competing with the company in various capacities should they become employed elsewhere. Generally, non-compete agreements are designed to protect a business from having an employee who:
  • Starts a competing business in the same location
  • Pulls the existing customer base over to a new competing business
  • Goes to work for a competitor in the same location

What Limits A Non-Compete Agreement?

Non-compete agreements are typically limited by two predominant factors: location and duration. In order for a non-compete agreement to be enforceable, it must have a duration and scope that can be considered "reasonable" in the eyes of the law. Typically, non-compete agreement will not hold up in court if they:
  • Span too great a time period
  • Cover too large of a geographic area
  • Prevent the employee from earning a living in his/her field

The duration of many non-compete agreements ranges from two to three years. The geographic scope typically depends on how wide the customer base is for the company.

Questions About Non-Compete Agreements? 

At O'Donnell Law Center, we specialize in business law at the Lake of the Ozarks. If you are a business owner who is preparing to hire employees for the first time, we would be happy to help you draft a comprehensive non-compete agreement that will protect your business interests. If you are an employee preparing to start a new position, we can review your new employer's proposed non-compete agreement to ensure it is something you can be comfortable signing. Whatever you need, you can be confident that our Lake of the Ozarks attorney and the rest of our team will do everything we can to take the burden off of your shoulders. To learn more about our legal services in Camden County MO, visit our website at www.ODonnellLawCenter.com.


We Carry Your Burden ~ You Carry On With Life.

Disclaimer: No attorney-client relationship is created by the publication of this blog.


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Phone: (573) 552-0317

O'Donnell Law Center, LLC
1026 Palisades Blvd. Suite 3

Osage Beach, MO  65065

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