Non-compete agreements have fallen out of favor with courts and legislators over the last several years. However, it is still possible to create an enforceable non-compete. You must ensure that the scope has limitations, the hardship imposed on employees is not unreasonable and it does not interfere with public interest.
Even within this somewhat narrow framework, there are provisions that you can include in your non-compete agreement for your own protection or as a concession to employees. Here are a few examples:
- Attorney’s fees
Your non-compete agreement should include a provision that if you have to go to court to enforce it, whichever party loses has to pay the attorney’s fees and legal costs for both sides. This puts a responsibility on the employee and may serve as a deterrent against a breach.
- Injunctive relief
If a former employee enters into competition with you in violation of the non-compete agreement, you can ask the court for an injunction. This is a court order preventing another party from performing a specific act or behavior. In this case, injunctive relief against a past employee would prohibit actions that amount to competition with you.
- Savings clause
If you have to litigate your non-compete agreement in court, there may be a particular clause or section that the judge rules invalid. A savings clause prevents the court from invalidating the entire agreement. It states that if one clause is invalid, the rest still remains intact.
- Choice of law or forum
This is a concession that you can make to your employees’ benefit. It gives your employees the choice to hold the litigation in a location that is more convenient for them, as well as the choice of which jurisdiction’s laws will apply.
Making minor concessions such as these to employees may serve as an incentive for them to sign the non-compete. They can also help the agreement seem more reasonable in the eyes of the court.