Back to Business Monday: Importance of Non-compete

It sounds like common sense, but even 'common sense' isn't really all that common in society. If you have a truly innovative idea, or even a successful business, it is a very good idea to have anyone you trust your client list/intellectual property with to sign a non-compete form. In a society in which a sense of entitlement is the 'norm' (think grasshopper vs. ant.. there are MANY MORE grasshoppers than ants nowadays) a disgruntled employee can quickly capture your client list, or take your innovative ideas and run with it. They can either sell your client information or idea to another person, or try to form their own business using your ideas. There is nothing to stop them from doing this, unless a non-compete is signed at the time of hire.

A non-compete is a document, or a clause in your employee/employer agreement which states something along the lines of "in the event that you leave (company name/employer/etc) or are separated from employment at (company name, etc), you agree to not share, solicit, sell privileged information received during your employment at (company name), or work for a competing company. This agreement is formed on (this date) and lasts for a period of 2 years (or another time frame) after separation of employment."

There are many resources you can find online for free which will give you a sample contract, or a sample non-compete clause, that you can reword to suit your needs. No matter where you get your documentation or forms from, it is a good idea to have an attorney look them over to ensure all details are worked out.

Creating a non-compete:
It can be helpful if you draft what provisions you want included in your agreement.

Explain so that no details are left out what you want your agreement to bind the agreeing parties to.

Have an attorney look over your document.

Have the contractor sign and date the agreement, along with yourself and at least one witness. It could be a good idea to also have this document notarized. Make a copy to give to the contractor, keep one for yourself, and possibly one for the witness to hold on to.