What Employers Should Know About Noncompete Agreements

Noncompete agreements can play an important role in protecting legitimate business interests, but enforceability often depends on how narrowly and carefully the agreement is written.

Engage PEO Senior Attorney and HR Consultant Evan Smithers discussed the issue with MarketWatch, noting that a signed noncompete does not automatically mean the agreement will be enforced. Courts may consider factors such as the employee's position, access to proprietary or confidential information, the length and scope of the restriction, and how broadly the agreement defines a competitor.

For employers, careful drafting and regular review are important. A noncompete should clearly identify the business interest it is designed to protect and place reasonable limits on the employee. An agreement that broadly restricts an employee from working for nearly any company in an industry may be more difficult to defend than one tailored to the employee's role, responsibilities and access to sensitive information.

Noncompete requirements vary significantly by state and can change over time. Employers with employees in multiple states should review restrictive covenant agreements based on the laws that apply in each jurisdiction and consider whether existing agreements still fit the roles and business interests they were intended to protect.

Read the full MarketWatch article featuring Evan Smithers: I need to get out of my job, but I've signed a noncompete. Can I still leave for a competitor? https://www.marketwatch.com/story/i-need-to-get-out-of-my-job-can-i-leave-for-a-competitor-if-ive-signed-a-non-compete-33d3164b

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