Unlock the Power of Digital Signature Legitimateness for Non-Compete Agreement in the United States

How to eSign a document: digital signature legitimateness for Non-Compete Agreement in United States

the following BL TV program is brought to you by O'Flaherty law please enjoy welcome to learn about law my name is Kevin o Flaherty from O'Flaherty law and today we're gonna talk about non-compete agreements and answer the question when is a non-compete agreement enforceable so first let's talk about what a non-compete agreement is a non-compete agreement is an agreement between an employer and an employee that during the term of the employees service with the employer and after the employee's job is terminated for a particular period of time the employee is not going to engage in competitive activities with the employer it's really a balance between restraint of trade on the one hand that we don't want to see but also protecting an employers investment in an employee we don't want the employer to give the employee a bunch of skills experience and trade secrets only to have them immediately jump ship and go take that information and skills to a competitor so oftentimes when an employer is going to hire a skilled and important employee they'll include in the employment agreement a non-compete clause that prevents them from directly competing with the complete the employer for a particular period of time so this is often the subject of litigation about whether this can be enforced because employees obviously want to go and use that those skills that they've gotten in the marketplace so the issue is generally whether the non-compete clause is too broad in order to be enforceable a non-compete clause has to be properly limited in scope and the issue is whether the scope is reasonable and this comes down to three things that courts have to weigh one is does the non-compete agreement actually protect a legitimate business interest two does the non-compete agreement place an undue hardship on the employee and three does the non-compete agreement violate public policy so as far as the non-compete agreement protecting a legitimate business interest that comes down to really three things geographic scope the amount of time that it lasts for and the type of activity that it protects so let's look at each one of those three things one so the simplest is geographic scope the non-compete agreement has to be limited in geographic scope to an area that the employer actually does business or is planning to imminently do business in the future so if you just do business in Naperville then you can limit your non-compete agreement to a 5-mile radius of your Naperville office you can't really say all of the state of Illinois is barred from the employee competing for you from you because you don't want to make it so that they can't ply their trade anywhere in the world that's just where you're actually doing business you don't want them competing with you if you are doing business in the entire state of Illinois then you can say that they're not allowed to compete in the entire state of Illinois if you're doing it nationally then it can be in America but the test is really where the employer where the employer is actually doing business time is also important generally we look at a five-year duration for non-compete agreements if you're going any longer than five years you're running the risk of it being unenforceable the more important the employers job and the more key information that was shared shared with them the more likely courts are going to allow a longer duration for non-compete agreements finally the type of activity is also important you have to actually specify the particular thing that the employee can't do to compete with you and it has to be at the type of activity that is a legitimate business interest for you to protect so you can't just say the employee can't work at too broad of a type of competitor it's got to be something that actually competes with your business and a type of role that actually competes with your business finally a non-compete agreement actually requires independent consideration so consideration is quid pro quo that is I'm getting something in return for signing the non-compete agreement if I'm the employee now if you do this as part of their employment contract that means that's consideration right there the consideration is that they're getting a job and in return they're signing this non-compete agreement but if they already work for you you can't just force them to sign a non-compete agreement sure they can sign it but it won't be enforceable unless it's tied to some sort of bonus or something that they weren't going to have anyway as part of their job now non-compete agreements like I said if they're properly limited in scope to a legitimate business interests tend to be enforceable by course however there are other alternatives that are less scrutinized and these are non solicitation clauses non-disparagement clauses and trade secret clauses and not solicitation clause basically says that it the employee can't offer to have other employees or customers come with them to a competitive business so they're allowed to work for competitive business if there's not a non-compete clause in place but they can't kind of poach the customers and employees of the original employer and courts are much less likely to screwed into that scrutinize whether this is properly limited in scope than a non-compete agreement now disparagement means that they can't say anything negative in public about the employer and a trade secret clause means that they're not allowed to share certain specific trade secrets that they've learned at the employer with competitors and these are much more easily enforceable than a non-compete clause although again if the knot could be clauses limited in scope it will be enforceable so if you have any questions you can leave them in the comment section below this post I learned - about - law comm or below the video on our youtube station if you found this helpful please subscribe to us on Apple music SoundCloud YouTube or our email list which you 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