Imagine: in a region where hiring and retaining competent employees is becoming increasingly difficult, a multi-national company announces it will build a plant and employ more than 10,000 workers over the next few years. The pressure to get and keep your best employee has just increased, and the ripple effect touches every aspect of this competitive employment situation. Seeking to maintain your competitive position at a time when employees are being wooed to leave, you may want to explore using noncompetition and nonsolicitation agreements, but are they enforceable? What happens when a well-qualified employee applies for an open position, but informs you that she signed a noncompetition, nondisclosure agreement with her current employer? How will that impact your hiring decision?
The complexities surrounding drafting and enforcement of noncompete and nondisclosure agreements continue to plague employers, and are one of the most heavily litigated areas within employment law. A range of important details can render a thought-to-be sound agreement void, such as overbroad or vague restrictions on time or territory, or whether consideration supports an agreement. And what works in one state may not work in a neighboring state – where some of your workforce may reside.
What this means for you
More than ever, employers are implementing employment agreements that contain noncompetition and related restrictive covenants. You may think your company and workforce are protected, but not knowing the ins and outs of these agreements and their enforceability may leave your company at risk.