Non-Compete Agreement - The Prenuptial Agreement of Employment Law

Sanders Law Firm, PLLC – Randy W. Ivie, Attorney 336-724-4707

It’s a classic story line. Boy meets girl. Boy falls in love with girl. Boy wants to marry girl but fears the loss of half his wealth if the relationship falls apart. This is followed by the boy’s awkward attempt at broaching the subject of having girl sign a prenuptial agreement.

While prenuptial agreements have lost some of the stigma they once held, there remains a widespread belief that asking someone to sign one means that you lack faith in the relationship, in the institution of marriage or the other person. Accordingly, it may be embarrassment that prevents more prenuptial agreements from being executed.

In the world of business relationships, however, there is no room for such embarrassment. A business relationship is not sacred institution and there is every reason to believe that it won’t be death that does the parting. If you are thinking about hiring a new employee, bringing on a new partner, or adding a new member to your LLC, you don’t have the luxury of not thinking about what could happen when the relationship ends. You could lose much more than you might think in terms of confidential or proprietary information. How will you prevent your ex from commandeering your customer accounts and potential clients, your marketing and sales ideas, your future plans and strategies and your techniques and methods of doing business? What will keep that person from setting up shop down the road and setting out to destroy you with your own information and resources?

A non-compete agreement is designed to protect your interests after a relationship ends. It restricts the use of your assets by someone else whose privileged relationship with you or your company provided access to a wealth of information and resources that can and will be used against you. Without a non-compete a court of law won’t be able to help you much.

There are limitations as to the limitations and restrictions that can be negotiated through a non-compete agreement. First, there has to be consideration. You are asking the future ex-employee, ex-partner or ex-member to give up the right to use your assets. While that may not sound like much, it requires that you give something in return. That something may be the very relationship you are considering, but, for that to qualify, the non-compete has to be part of the “I do.” While a non-compete can be implemented after the relationship is formed, it will require that you find something else, and something more, to give up in return.

Second, the limitations and restrictions have to be reasonable. Reasonableness is in the details and every situation may warrant different terms, but the non-compete has to be appropriate in terms of time and scope. If it’s not, a court is likely to find that you overreached and that the non-compete in unenforceable.

Accordingly, you need the help of an attorney to consider your situation and proscribe the appropriate limitations and restrictions. Sanders Law Firm, PLLC has the experience and knowledge to craft a non-compete agreement or clause that will provide you the maximum protection. Before you tie the knot, call us. There’s nothing to be embarrassed about.

Call 336-724-4707