Non-compete agreements: Understanding the basics

Non-compete agreements are confidentiality contracts that protect companies ideas, research and trade secrets.

Employees who work with sensitive information at their place of employment or companies that wish to limit competition may have their workers sign non-compete agreements. These agreements are designed to protect intellectual property a company has developed, such as copyrights, patents, trademarks and classified information. Without a non-compete agreement, companies have limited ability to prosecute employees who use this information for profit by going to work for another company or by starting up their own business using the knowledge they have gained from work.

According to the U.S. Department of the Treasury, the number of non-compete agreements in the nation are growing, as companies struggle to keep the fruits of their training and research safe. Employers and employees alike should keep in mind that confidentiality agreements or nondisclosure contracts are only viable for a certain period of time once a worker leaves the company or begins to work for another company in the same industry.

What types of companies use non-competes?

A wide-range of industries require their employees to sign non-compete agreements, from government employees and engineers, to retail workers, camps and artists. These contracts are used quite frequently in technical and sales positions, as companies do not want the product of their research and development into new systems leaked to other companies who may steal the ideas and trade secrets learned on the job. Jobs such as textbook editors, social media marketers and even yoga instructors are being asked to agree to non-competes in order to work for certain companies.

Are non-competes always beneficial?

There are some parties who argue that non-compete agreements are not always beneficial to companies and the economy as a whole. Adventure capitalists, for one, argue that these contracts decrease innovation and keep people from starting new companies with their newly developed ideas. The fact that they have worked in an industry where they may have learned techniques and valuable information, should not keep them from starting companies of their own and propagating these new ideas. Those in favor of non-competes argue that the agreement spur the economy by encouraging companies to invest in their workers. The agreements also keep workers from walking off with customer lists, codes, training or trade secrets which could ultimately harm the company.

Finding legal assistance

When someone has broken their end of the contract, they may require the assistance of an attorney who has experience in employment law. A lawyer in Massachusetts may be helpful in listening to the details of your case and answering any questions you may have about your legal options. An attorney may help you get back on track and assist you through the legal process.

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