Operating a business can be challenging, especially when managing employees, but an attorney can help design and implement restrictive covenant agreements to protect your company. You may not realize the different options in regards to these legal agreements. Here are some of the different types of restrictive covenant agreements and how they can protect your business.
Non-competition Agreement
The most common agreement is the non-competition agreement or “noncompete.” Noncompete agreements will prohibit your employee from working for a competitor of your company. This reduces the risk of a former employee competing with your business since they will have had an inside scoop on your business’ trade secrets, operation, products, or services.
Non-Solicitation Agreements
A non-solicitation agreement prohibits a former employee from soliciting or contracting business from your past clients and customers. It can also be used to prohibit former employees from hiring away your current employees.
Non-Disclosure Agreements
A non-disclosure agreement will prevent your former employees from disclosing your company’s trade secrets and other business information to competitors.
In addition, employees who sign a non-disclosure agreement will not be able to share information with third parties, since this can affect your company’s reputation.
Confidentiality Agreements
During the initial hiring process, you should have your new employee sign a confidentiality agreement. While surprising to learn, a confidentiality agreement is different from noncompete agreements.
A confidentiality agreement asks that the employee keeps all business-related information confidential during and after employment. Not only will this agreement hold the employee liable if information is disclosed to competitors and third parties, but the confidentiality agreement also holds you liable in case information regarding your employee is ever disclosed.
Are You Required?
It is important to note that you are not required to ask potential employees to sign a restrictive covenant agreement. However, investing the time and energy into drafting these legal documents can protect your business reputation, name, and finances from serious devastation.
When meeting with your attorney, be sure to understand your state’s laws regarding employee rights and restrictive covenants. Protecting your business name, profits, and other employees is possible by contacting Simon|Paschal at (972) 893-9340 for advice on noncompete agreements in Dallas TX.
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