Business relationships can be complex, particularly when trade secrets and intellectual property are involved. To protect this sensitive information, many businesses turn to certain business and employee contracts that prevent key people from causing the company harm.
A trusted Kernersville non-disclosure and non-compete agreement lawyer at Apple Payne Law can help ensure these contracts meet the standard set out by state law.
Common types of business and employee agreements used by North Carolina companies include:
These agreements can be powerful tools, but the courts pay close attention to determine if they are valid under the law. It is not uncommon for judges to strike down these agreements when they are drawn too broadly.
A business might have many reasons to insist on non-compete agreements with employees. When employees obtain sensitive information or trade secrets, little prevents them from leaving to form a competing business with that information in hand, something a non-compete agreement is designed to prevent.
The problem is that many non-compete agreements go too far in the eyes of the law. State law sets strict limits on non-compete agreements.
In general, the courts disfavor these agreements as they limit the right of individuals to pursue their chosen business interests.
However, under certain circumstances, the courts will uphold a non-compete agreement if it is narrowly tailored to the circumstances.
A Kernersville contracts lawyer at Apple Payne Law can assist with keeping the scope of non-disclosure and non-compete agreement in line with state law.
These agreements have four important elements, and courts will typically strike them down should they not comply:
Non-disclosure agreements—also commonly referred to as “confidentiality agreements” —are often seen as less restrictive than non-compete agreements. That does not mean a court will not strike down these agreements under the right circumstances. In fact, the law generally approaches these agreements with the same degree of skepticism as it applies to non-compete clauses.
Unlike non-compete agreements, the law does not require confidentiality agreements to set restrictions on time and territory. Therefore, an open-ended non-disclosure agreement does not inherently violate the law.
To comply with the law, these contracts may be unlimited in time to protect a legitimate business interest. If a party cannot articulate a legitimate interest that would be put at risk by time limits on the non-disclosure agreement, a court could strike down the confidentiality clause entirely.
This is why having a competent Kernersville business lawyer at Apple Payne Law help properly draft these for the business’s interests is crucial.
If you are concerned about protecting the interests of your business, non-disclosure and non-compete agreements could be the answer you are looking for. However, state law places strict limitations on when these agreements are valid.
Contact us today, and a Kernersville non-disclosure and non-compete agreement lawyer at Apple Payne Law will walk you through creating these important employment agreements.
Can a non-disclosure agreement prohibit an employee from working for any competitor?
No, a non-disclosure agreement cannot prohibit an employee from working for any competitor. The scope of the restriction must be limited to a reasonable extent.
Can a non-disclosure agreement be enforced against a former employee?
Yes, a non-disclosure agreement can be enforced against a former employee if the terms of the agreement are reasonable and comply with state law.
How long can a non-compete agreement last?
The length of a non-compete agreement varies by state, but generally, any term beyond two years is subject to close scrutiny from the courts.
Can a non-compete agreement prevent an employee from pursuing any career in their field?
No, a non-compete agreement cannot prevent an employee from pursuing any career in their field. The scope of the restriction must be limited to a reasonable extent.
Can a non-compete agreement be signed after the employee starts working?
Yes, a non-compete agreement can be signed after the employee starts working, but the employee must receive something of value in exchange for agreeing to the terms.
Can a non-compete agreement be enforced if the employee was terminated without cause?
If an employee was terminated without cause, the enforceability of the non-compete agreement might be affected, depending on the specific circumstances and state law.
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