Non-compete contracts an important issue for Nevada businesses
Businesses need to pay close attention to some of the information contained in non-compete contracts.
When a person is about to begin a new job, many employers will often require the individual to sign a non-compete agreement. These documents place specific restrictions upon the employee should that person decide to leave the company. Employers want to be able to protect some of their business practices, and prevent employees from using this information to place them at a competitive disadvantage.
While these agreements are common in many companies, these non-compete provisions have been a frequent source of business litigation between the parties involved. Often, employees feel that the terms are overly restrictive, and may contest the agreements. This mean that the businesses will have to defend the non-competes, which can take time and money, and may lead to an unpredictable result inside the courtroom.
There are very specific requirements in place that must be satisfied before they will be held as valid by courts in Nevada. Courts generally feel that the non-competes are restrictions on trade, and therefore should receive a close examination to determine if the agreement should be carried out. Specifically, the court looks to see if the agreement is overly restrictive, that is, it is places restraints that are more than reasonably necessary on the employee to protect the interests of the business.
To determine if the restraints are reasonable, the court looks at many factors, including the time and geographic location specified in the agreement. If the business tries to place terms that cover too much ground, such as the individual is unable to work in the industry anywhere in Nevada for several years, the courts may find this to be too far-reaching. They could determine that the agreements are not valid, and allow the employee to work at the new company.
It is extremely important that businesses pay attention to new hires who may be under a non-compete contract with former employers. The Nevada courts have allowed the hiring companies to be included in lawsuits that allege violation of non-compete contracts. This means that if the hiring organization has knowledge of the non-compete agreement, and knows that their actions could violate the terms of the document, the business could be added as a defendant in any actions against the employee.
If you have questions about an existing non-compete agreement, or about drafting an agreement for your employees, contact the experienced attorneys at the Law Offices of P. Sterling Kerr, P.C., to receive answers tailored to your specific situation. The attorneys at the firm are committed to helping you understand all of the options available to you, and helping you find a solution that meets the needs of your business.
Keywords: non-compete contracts, business litigation