Non-Competition and Non-Disclosure Agreements

Many employers require their employees to sign non-compete and non-disclosure agreements as a condition of employment. There are a number of reasons for such agreements, although the primary stated reason is that companies want to protect their investment in you and their own information.

The crucial question for any employees is: if I sign a non-compete and non-disclosure agreement, can I work in the same field for a different company after my employment ends? No employee wants to limit their future career options.

A non-disclosure agreement protects trade secrets, intellectual property or any other special information obtained by an executive during his employment. While these agreements are almost always required, you should be careful not to sign one that would limit you from using publicly available information or knowledge you developed on your own. Even though the agreements may not be enforceable, it may take years to litigate the coverage.

A non-compete agreement may be enforceable if it is:

Necessary to protect an employer’s legitimate business interest;
Reasonably limited in geographic scope and duration;
Reasonably limited to the scope of occupation; and
Supported by consideration.

But, even in those situations, there may still be a way out.

Contact us if you have any questions or check out our FAQs page on executive compensation.