How to go about drawing up a non-compete agreement?
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How to go about drawing up a non-compete agreement?
I have a small beauty business. I want my employee to sign a non-compete agreement and she is willing to do that. Does IN favor the non-compete agreements or not? I give special training to my employee so it is like trade secrets. What are the restrictions for non-compete agreement? How long is it valid? Do I need a lawyer to do that or I can download non-compete agreement online?
Asked on October 21, 2010 under Employment Labor Law, Indiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
A noncompete has to be "reasonable" in terms of time and geographic location. For example, while there is no hard-and-fast rule, for a hair stylist, for example, it might be reasonable to restrict the person from not opening up a shop or going to work for someone else within, say 5 or 10 miles of your location (whatever radius you can defend as the distance your customers travel) for, say, a period of 6 months to 1 year. Generally, the more limited the agreement, the more likely it is to be enforced as is.
In addition, have her signed a confidentiality agreement--that she won't use any proprietary information, defined as, for example, particular styling techniques, customer names, vendor names, or business and market plans--ever, for her own or a third party's benefit. And have her also sign a non-solicitation--that she won't market to your customers. (That doesn't stop the customers from voluntarily going to her if she leaves; but she can't reach out to them.)
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