Best Practice: Protect your brand with a non-compete agreement so employees cannot leave your business and immediately open a competing one.
Today’s Article: Protect Your Brand with a Non-compete Agreement
Your brand is one of your most valuable business assets. It distinguishes your company or product in the marketplace. When hiring and training employees, it is important to set an expectation that they cannot open a similar business in your market.
What is a Non-compete Agreement?
This agreement prevents departing employees from becoming a threat to your business by opening a similar business in your area. With a signed non-compete agreement, the employee legally cannot take your information, customer lists, processes, procedures, policies, etc. and use them to set up a new business to compete against you.
This agreement has to be reasonable in length of time and geographic area served. For example, one year would be more reasonable than three years and the geographic area needs to be similar to the existing geographic area of the business.
In drafting the agreement, be sure to be specific in length of time, geographic area served and the type of business you operate. Have the employee sign and date.
Action Step: Consult your legal advisor about protecting your brand by having each key employee and future hires sign a Non-compete agreement.
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