Employees are increasingly being asked to sign non-compete agreements or confidentiality agreements when they are hired. These two documents have different purposes, but both are aimed at protecting the employer from future actions on the part of the employee. It is generally a good idea to have a non-compete attorney review any legal document before you sign it.
Non-compete agreements, generally drafted by the employer’s attorney, seek to protect the employer by preventing the employee from working for a competitor for some specified period of time. These agreements are common in the television and radio industries and with software or high-tech companies. In North Carolina, a non-compete agreement must be very specific and not overly limiting to be enforceable. As an example, if an employer included a blanket statement that prevented the employee from finding work in the same industry anywhere in the U.S. for a period of two years, the courts would likely find this too restrictive in that the employee might not be able to find any suitable employment. If, on the other hand, the non-compete agreement stated that the employee could not work for ABC Software for a period of 12 months following the date of last employment, the courts would likely rule this as enforceable.
Employers may also ask employees to sign confidentiality agreements. These agreements may serve more than one purpose. As an example, if a business deals with data or information on behalf of its clients that is confidential, the confidentiality agreement signed by the employee would convey the fact that the client’s data was proprietary and would typically indicate penalties for sharing client information. A second and more common use of a confidentiality agreement is to protect the employer’s knowledge “assets” – meaning the processes by which the employer does business and intellectual property (like code or documentation), etc. Again, to be enforceable in North Carolina, a confidentiality agreement must be specific.
If you have been asked to sign either a non-compete agreement or confidentiality agreement and have concerns, you should consult with an employment law attorney. Likewise, if you have been sued by a former employer for violating either type of agreement, you should speak to an attorney. Call Merritt Webb at 1.800.556.8404.
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