What Employers Should Know About Non-Compete Agreements

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Protecting the best interests of a company can be a volatile process. Business owners need to balance developing and enforcing practices that do not violate employees' rights with establishing processes that benefit the business. In some cases, employers make mistakes that put them in an unfavorable light.

In order to avoid the consequences of negative business decisions, it is important for employers to make sure they are in compliance with the laws and review their employment practices with a legal representative. One of the common sources of tension is employment contacts, including non-competition agreements. Understanding how these contracts should be prepared can be crucial in avoiding lawsuits and negative publicity.

Non-compete agreements are often used in industries like technology and sales, where innovation is a top priority and protecting confidential information is vital to a company's success. 

An employer can request that employees sign a non-compete in order to limit employment opportunities from which an employee may be restricted if they leave the company. This ensures that any confidential information, including trade secrets or client lists, is protected.

However, these agreements must meet a number of legal requirements in order to be considered valid and enforceable. For instance, they must be protecting legitimate interests and place reasonable limits on an employee's future employment.

In order to avoid a potentially messy and lengthy lawsuit filed by a previous employee, business owners can take steps to ensure their non-compete agreements, and other employment contracts, are properly developed and carried out. For assistance in this area, it can be a good idea to speak with an attorney familiar with both federal and Maryland state employment laws.