Unlock the Power of Electronic Signature Legality for Non-Compete Agreement in United States

How to eSign a document: electronic signature legality for Non-Compete Agreement in United States

what is a non-compete a non-compete is an agreement between an employer and an employee that enforces a restriction on the employee a former employee under a non-compete agreement could be restricted from working for competitors for a stipulated period of time usually employers use non-compete agreements to protect their valuable intellectual property such as trade secrets customer client lists and business practices it's a way for employers to make sure that their valuable assets will not be made available to a competitor state law determines when and where a non-compete agreement is enforceable state law governing this type of agreement varies specifically among states and industries not all non-competes are enforceable courts have determined that a non-compete agreement may limit the employees ability to make a living and will not enforce a non-compete that is not reasonable again state law will determine the period of time to enforce a non-compete agreement most courts uphold time limitations of up to two years however if the confidential information is valuable for only a short period of time then the duration of the non-compete restriction should match that time period non-compete agreements may not be suitable for every industry some states regulate the enforceability of non-competes by statute or industry regulation for example a non-compete agreement may not be enforceable against an attorney because ethical prohibitions on preventing clients from retaining the attorney of their choice many states also limit the enforceability of non-competes in the medical profession Hawaii passed a law that banned any software development and information technology companies from requiring employees to enter into a non-compete how far can a non-compete agreement reached geographically the reasonableness of a non-competes geographic scope is generally determined by the employees activities and of state law if the employer does business only in one state our restriction that prohibits an employee from working in another state is almost always unreasonable differentiating a non-compete agreement from a confidentiality agreement they're both restrictive covenants but they are not the same they both prevent an individual to divulge the company's intellectual property but in different contexts a confidentiality agreement also known as a non-disclosure agreement or simply NDA prohibits an individual to share any confidential information given to him such as trade secrets the individual does not need to be an employee of the company on the other hand a non-compete agreement is made between the employer and the current or potential employee and restricts the employee from working in a competing company in the same field does the agreement have to be made at the beginning of employment it is not required but it's advisable when the company cannot avoid revealing confidential information to the new employee or before disclosing this information to current employees they each must agree not to share or practice this information with any other company going forth by signing a non-compete agreement a current or future employee has the option to refuse signing a non-compete agreement and the company can also refuse to hire a new employee or to fire a current one refusal to sign could give the employer a justified reason to fire the employee