Overview: One type of employment contract is the noncompete agreement. A noncompete agreement prevents an employee from pursuing a similar profession or trade in competition against the employer (usually post-employment). Noncompetition agreements are used to discourage an employee from working for a competitor using the specialized knowledge, skills, or confidential information gained while working for the employer.
The majority of the states recognize and enforce various forms of noncompete agreements. Generally, the terms of a noncompete agreement will only be enforced to the extent necessary to protect the employer's legitimate business interests. Most states will enforce a noncompete agreement if contains reasonable limitations as to the geographical area and time period in which an employee may not compete with the employer.
Trends: A few states have enacted legislation requiring employers to provide employees with a copy of the noncompete agreement prior to or concurrent with making an employment offer or an offer of change of job classification. If an employer does not comply, the agreement may be unenforceable, exposing an employer to unwanted competition.
Author: Melissa A. Silver, JD, Legal Editor
It is critical that financial services industry employers understand the consequences of noncompliance with the many laws that apply to this highly regulated industry. This Legal Insight highlights some of the more notable legal requirements to help HR spot potential issues. By becoming more familiar with the growing number of rules applicable to the financial services industry, employers can and should take proactive steps to ensure compliance and thereby lessen any risk of civil and/or criminal liability.
In-depth review of the spectrum of Washington employment law requirements HR must follow with respect to employment offers.
In-depth review of the spectrum of Tennessee employment law requirements HR must follow with respect to terms of employment.
In-depth review of the spectrum of Vermont employment law requirements HR must follow with respect to terms of employment.
In-depth review of the spectrum of Texas employment law requirements HR must follow with respect to terms of employment.
XpertHR had added certifications that employers should provide to new hires to ensure that they are not subject to any restrictions on competition or subject to an agreement that would prevent them from using the confidential information of a former employer. The Terms of Employment section of the Employment Law Manual also now includes a discussion on obtaining these certifications at or prior to hiring.
The terms and conditions that govern the employment relationship are typically governed by federal and state employment laws, including antidiscrimination laws. This section helps HR professionals avoid discriminating on the basis of race, color, religion, sex, pregnancy, national origin, age, disability, genetic information and veteran status throughout the employment relationship.
In-depth review of the spectrum of New York employment law requirements HR must follow with respect to the terms of employment.
XpertHR's High-Tech Resource Center for HR: Restrictive Covenants helps high-tech employers handle their most challenging employment issues by bringing relevant resources together in one place for easy access.
In-depth review of the spectrum of Oregon employment law requirements HR must follow with respect to terms of employment.
Guidance for HR on the use of noncompete agreements to prevent employees from competing with the employer.
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