Non competes

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Are employee non-competes obsolete?

“… getting some push-back from new hires who weren’t happy signing contracts that restrict them from working for competitors or within the same industry after they leave their jobs. …

California bans non-compete agreements, except in some very specific circumstances. A handful of states, such as Florida, Virginia, and Washington, specifically prohibit overly broad non-competes. …

‘The non-compete itself doesn’t cover intellectual property. It just means you don’t compete’ …

… business leaders shouldn’t rely on non-competes instead of seeking the protections they actually need. Non-disclosure agreements and other intellectual property (IP) protections, while sometimes harder to enforce, actually address the specific issue about which most businesses are concerned–taking ideas and information to competitors.

In addition, 47 states and the District of Columbia have also adopted the Uniform Trade Secrets Act, which prevents employees from taking companies’ intellectual property to other businesses. … it’s a different story when you’re talking about owners or partners, however, especially when they’re selling their business. Even in California, those types of non-competes are allowed. ‘You don’t want those very owners to walk away and then put up a competing business doing exactly what they just sold. That undermines the idea of what it is the acquiring company’s purchased when they bought the company’ ….”

it also pays to be judicious in the information you share with employees. Every employee does not need to have widespread access to account lists and trade secrets. Instead, integrate systems that give employees the information they need to do their jobs well, but not free access to every customer list or piece of intellectual property on the company’s servers.

… exit interviews are also a good way to get a sense of whether you have a disgruntled employee on your hands and to reinforce any non-disclosure agreements and laws that apply. ‘The types of employees that are more likely to take your information or try to screw you are the types of employees who are unhappy’ ….”


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