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What makes a non-competition agreement legal?

On Behalf of | May 27, 2021 | Contracts

Non-competition agreements protect the legal interests of businesses all across New York. However, they have to be particularly tailored to be legal and enforceable. Before an organization has its employees sign non-competition agreements, it should ensure that their contracts are accurate, enforceable, and valid. This post will address some of the issues that can impose challenges on non-competition agreements, but no part of this post offers legal advice. Readers can always direct their employment and business law questions to knowledgeable attorneys in their communities.

Requirements of a non-competition agreement

One of the fundamental requirements of non-competition agreements is that they are relevant to the business interests of the organizations that wishes to impose them. For example, a business may not arbitrarily limit its employees future work prospects through non-competition agreements that have nothing to do with their operations. Non-competition agreements must be relevant in order to be enforceable.

Similarly, non-competition agreements cannot be too broad in their terms. They cannot restrict where, when or the type of work an employee may do in unreasonable ways. When a non-competition agreement comes under scrutiny, its scope and reach may be carefully examined.

Getting workers to sign non-competition agreements

Non-competition agreements are contracts. All contracts require consideration in order to be considered valid and enforceable. Consideration is a critical piece of the exchange between an offer and an acceptance. For a worker to sign a non-competition agreement, they must be offered some form of consideration for their acquiescence.

Non-competition agreements do not have to be complicated in to protect the interests of the businesses that wish to pursue them. As with all legal issues, it is important that businesses seek legal advice from knowledgeable business law attorneys before they attempt to execute these important documents. The failure to follow the rules of non-competition agreements may result in their unenforceability and damage to the businesses interests from the actions of its employees.