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Spotlighting noncompete agreements: some key factors

It is more than advisable for an employer to consider what might happen in the future regarding select employees who leave their positions to take up employment with a business competitor or go directly into business for themselves.

Indeed, and as we noted in our May 4 blog entry, it is an imperative.

By "select" worker, we mean this: an employee differentiated from most others by his or her routine access to top-level business information, including core planning objectives and trade secrets involving intellectual property and other matters.

Companies need to protect against the potential for such an employee to divulge proprietary information to rival entities. And they have every right to do so.

Our experienced business attorneys at the Manhattan law firm of Rich Michaelson Magaliff Moser, LLP, routinely help them do that, with a carefully negotiated, drafted and timely executed noncompete agreement often being instrumental in safeguarding key company data and processes.

Noncompetes are upheld by courts in New York across the country every day, but not routinely so.

And the reason underlying judicial refusal to enforce such a contract frequently relates to its infirmity in drafting.

The bottom line is this: Courts flatly frown upon any covenant not to compete that is written in a blanket fashion that seeks to enjoin an ex-worker from future employment on terms that unduly straitjacket future opportunities.

For example, a noncompete clause that addresses employment anywhere in the world will draw quick and close scrutiny from a court, as will any attempt to stifle new employment for a number of years.

We note on a relevant page of our website (which readers can readily access via the link inserted above) that our attorneys focus tightly on drafting noncompetes "that cover an effective geographic range and time span."

If you are an employer with questions or concerns about key employees who might someday compete against your business, we would welcome the opportunity to speak with you concerning sound legal protections you can take to guard against that possibility.

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