Many employers require employees to sign non-compete agreements when they become part of the workforce. However, the court may find that your non-compete agreement is not valid in the eyes of the law.
Having a non-compete agreement that is unenforceable is a waste of time. According to Findlaw, in order for a non-compete agreement to be legitimate, it must be reasonable in scope, geography and time.
What is “scope”?
Essentially, the non-compete agreement must not be too broad. For instance, if the position would require an employee to work with confidential information, the scope of the non-compete agreement can only be as long as the information is valuable. It is likely not legal for you to keep an ex-employee silent for the rest of their lives, for example.
What are the limits on geography and time?
Most non-compete agreements must have a reasonable endpoint. Again, it is unlikely that you will be able to swear somebody to secrecy on anything for eternity. You may be able to prevent a former employee from opening up a business within your direct geographic locale, but it is unlikely you will be able to prevent an former employee from opening up a business in a place you do not have a business established. Non-compete agreements can help protect you from a former employee poaching your current clients, but they cannot prevent business competition from former employees in its entirety.
You must be careful not to include anything in a non-compete agreement that the courts may believe unfairly hinders a former employee from earning a living. For instance, you cannot prevent an employee from finding a job with a competitor.