Should I Have Non-compete Agreements For All of My Employees?

Many employers have concerns that competitors will snipe key employees from them. The basis of the concern is normally for obvious reasons – in many instances key employees have access to clients, prospective clients, confidential or proprietary business information, and internal relationships with co-workers – this can all be very valuable, so naturally businesses want to protect it.

Unfortunately, many businesses either go too far or not far enough to protect their interests in these regards. Some businesses do not have any post-employment restrictions in place on employees, so that when a key employee leaves, the company is often left with little effective recourse to protect its interests. Then there are the businesses that go too far by having all employees sign restrictive covenant agreements which are too broad in their geographic and temporal scope to be enforced by the courts. It’s a fine line for employers to walk and one that almost certainly necessitates legal counsel.

So, the question for most every employer is – should you have a non-compete? Almost certainly, but probably not for all employees. It’s the rare business that employs only people who, if they left to work for a nearby competitor, would do substantial harm for the business (e.g. clerical staff, non-professionals, employees with no or limited access to clients and proprietary information). Identifying key employees and/or job classifications where a non-compete agreement would be necessary to protect your interests is ideal and to the employee likely understandable and perhaps even expected.

Thompson Coe and myHRgenius Tip of the Week is not intended as a solicitation, does not constitute legal advice, and does not establish an attorney-client relationship.