A non-compete agreement is a legal document that prevents an employee from working for a competitor of their current employer for a certain period of time. This kind of agreement is highly important if you want to protect your business` confidential information, trade secrets, and client relationship. However, creating a non-compete agreement requires proper understanding and guidance. In this article, we provide some tips on how to create a non-compete agreement that is legally-binding and effective.

1. Identify what needs to be protected

The first and foremost step in creating a non-compete agreement is to identify what exactly needs to be protected. Discuss with your business lawyer and identify all confidential information, client lists, trade secrets, and other critical business information that you want to keep secure. Remember that your non-compete agreement should only protect what is truly necessary, and not be overly broad.

2. Determine the scope and duration

Once you have identified what needs to be protected, the next step is to determine the scope and duration of your non-compete agreement. The scope refers to the geographical area and the types of business your non-compete agreement will cover. The duration refers to the length of time your employee is prohibited from working for a competitor. Keep in mind that while a longer duration and wider scope may provide greater protection, they may also be subject to legal challenges.

3. Make it clear and concise

Your non-compete agreement should be written in clear and concise language. Avoid using legal jargon or overly complicated terminology. Make sure that your employee can understand the terms and conditions outlined in the agreement. This can help to avoid legal disputes down the road.

4. Offer Consideration

A non-compete agreement is a legal contract, and as such, it needs to be supported by consideration. This means that you must offer something of value to your employee in exchange for them agreeing to the terms of the non-compete agreement. Consideration could be anything from a signing bonus, to a raise, to ongoing employment.

5. Review and revise

Before you finalize your non-compete agreement, make sure that you have reviewed and revised it multiple times. Check for errors, inconsistencies, and ambiguity. Discuss any potential issues or concerns with your business lawyer. Once the agreement is finalized, make sure that your employees understand the terms and conditions, and have the opportunity to ask questions.

Creating a non-compete agreement can be a complex process. However, by following these tips, you can create a legally-binding agreement that protects your business interests and ensures employee compliance. Keep in mind that non-compete agreements can be subject to legal challenges, so it is always best to consult with a business lawyer before drafting one.