On Fri, Apr 17, 2015 at 9:09 AM, David Skinner <[email protected]> wrote: > All, > > My company is working on introducing some non-compete documents. I'm going > through them to recommend some modifications. In the documents they state a > non-compete period of 2 years following employee termination date.
In my experience with non-software companies here in Utah, 2 years is typical. Things I have found/observed with my previous employers on this topic: - California will not enforce a non-compete. Make sure Utah law applies (or other non-compete friendly states) to the agreement -- the document should state which state law applies. Or, don't hire anybody in California to work from California if you want to enforce the non-compete. Ditto for anybody working out of the country -- you can't really enforce those because of costs and distance. - When you go to enforce a non-compete, usually you end up negotiating with the new employer and the former employee. I've seen a situation where the employee ends up assigned a non-competing product line at the new employer as part of the settlement. Even if you don't stop the employee from working for the competitor, through the discussions you've made it clear to them that they can't use your information for their benefit. - A reasonable non-compete must not be over-reaching but also not wimpy. If a non-compete is unreasonable, a judge can choose not to enforce it. E.g. if a person's career is programming in PHP, you can't have a non-compete that prevents him from programming in PHP. If he programmed a very specific tool for you and then went to a competitor to program the exact same thing 1 month later, then a non-compete baring that is reasonable. - Non-competes can protect things like client lists, vendor lists, etc. You don't want your employees walking out the door and creating a competing company or working for a competitor using all of your customer lists. I've seen people hired solely because the competitor wants to milk your former employee of as much information as they can. You need a culture of confidentiality of information. - If you have a non-compete, you need to enforce it. If you selectively pick and choose who you want to enforce it against, the court will toss out your argument when you do want to enforce it. - Make it clear up front that you have non-competes AND make sure they are actually signed! Some companies are very sloppy about the process and an employee leaves for a competitor and you find out that employee managed to not sign the document (or its missing). - All too often, I've seen competitors created by partnerships. A company works with your company and they learn the process and then go and compete with you later. I've seen that with employees too. Or, with employees of your vendors. Be careful you're not training your future competitors in your day to day business. Just my thoughts.... _______________________________________________ UPHPU mailing list [email protected] http://uphpu.org/mailman/listinfo/uphpu IRC: #uphpu on irc.freenode.net
