How to create a non-compete you can live with

It’s all warm fuzzies when an employer and employee come to terms on a new relationship but as anybody who’s ever had a job can tell you even the best job relationships can go bad.

What then?

You can consider your non-compete clause to be a pre-nuptial between employer and employee which determines in advance what happens in the case the relationship – for any reason – ends. No matter which side of that desk you sit on, you’re going to want to be prepared for all possibilities.

It’s a question you need to ask yourself right up front.

Why?

Because when you sign a non-compete clause in Michigan it’s likely, at least for a certain amount time, and in a certain geographic area, you may not be able work in that particular field.

What’s more, it may apply whether you quit or get fired.

Too often employees sign over their rights to continue working after a job ends without really understanding the magnitude of the agreement.

Things to consider before signing a non compete agreement:

How long will the non-compete clause last after you’ve left the particular company?

What is the geographic area covered by the clause; will you be able to take a similar job any place close to where you live?

Does the clause apply if you’ve been fired?

Does the clause include any kind of buy out?

As an employer a non-compete clause can be even more important. You might have trade secrets to protect, processes and procedures you’ve created individual to your company. Maybe you’re working to capture a certain market and have made investments in your employees to make that happen. Maybe you’ve invested a great deal in training for your employees and would rather not have some other business reap the benefits of your investment.

What if one of those employees quits or gets approached by head hunters? You’re going to want to know you’ve done something to protect your most important assets.

Things for business owners to keep in mind:

Make sure the agreement is clear cut and to the point

Make sure the geographic area covered is large enough to protect your company but not so large as to make the agreement unreasonable

Make sure the length to the agreement is also reasonable

Make sure you are consistent with the non-complete clauses you ask for from employees who share the same jobs.