An employee non-compete agreement is a type of contract that employees and employers enter, in which an employee agrees not to enter into any competition with the employer during and after their employment term. This non-compete agreement is a legal contract and its mandate is to prevent employees from entering into professionals or markets that are considered a direct competition with their employer even after leaving that particular employment.

Employee non-compete agreements are usually enforced when the relationship between an employee and their employer comes to an end. The contracts are usually meant to benefit the employer in the sense that he/she is able to prevent the employee from competing against them in the next job or position that the employee gets. This means that the employee in such an agreement cannot work for the former employee’s competitor or in the same market. Employees can also not start up a business that is in the same field with their former employer’s.

In most cases, independent contractors and consultants who terminate their relationship with businesses find themselves limited by such contracts. Companies will always look for a way to protect themselves from facing stiffer competitions after separating from employees.

There are instances when employees ask for non-compete or employment agreement as a way to protect themselves against former companies or employers revealing sensitive information about them or their secrets to customers, clients and anyone else that may use such information against them. An employee may also use the same type of agreement to protect their clients, operations, formulas, customers, strategies, ideas, pricing and anything else that the company they were working for might use for their own gain. These kinds of contracts are usually used as confidentiality non-compete agreements and are legally binding.

What can be included in a non-compete agreement cover

Non-compete agreements are usually designed in such a manner that they are equal and fair for all the parties involved. For that reason, they will require certain information so as to be considered as legally binding:

• A date on which the agreement will start being effective
• The reason for the enactment of such an agreement
• The specific dates on which the employer or employee will be barred from working in a competitive manner
• The exact location that should be covered by the agreement
• Details as to how the non-competing other party will be compensated for agreeing to take part in such an agreement.

Non-compete agreements are designed to benefit both the employer and the employee. The agreement typically starts at the time after which the employment ends. Both parties must be in agreement on what the contract should state and the dates should be well set in advance. Employers should always think of a way to protect the business after employees leave and these kinds of contracts are an effective way to do it. With such a contract in place, employers will not worry about lost business secrets and any valuable confidential professional or business information that could be leaked.