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How to properly draft a noncompete agreement

To successfully run a business, you need to keep up with the competition in the industry. Keeping trade secrets secrets is a vital component of this. How can you do this if an employee who could access your trade secrets leaves the company? A noncompete agreement can help, but its terms must be reasonable to be legally valid. Here are some tips when drafting an agreement in Texas:

1. Its purpose should not be to punish employees for leaving.

A noncompete agreement is intended to protect company goodwill and from its secrets, training and assets from being shared with competition. Your agreement should focus on this above all else. If it becomes an unnecessary hindrance to exiting employees or is not related to protecting goodwill or trade secrets, it may not hold up in court.

2. The time and scope should be reasonable.

It is important to you to protect your business interests but you have to remember that employees also have their own interests and rights to seek employment elsewhere. Depending on their level in the company, it is reasonable to extend the agreement to six months, or even a couple years if they work at a very high level. Your terms must make sense though. Do not set a restriction against working in a different industry than your own company, for example.

3. Geographic limits must be reasonable.

Court may not uphold a noncompete agreement that has no geographic limits. Typically for salespeople you may restrict them from working in the same territory for which they worked for your company, although there are exceptions.

4. Do not try to draft an agreement on your own.

Non-compete agreements you can get off the internet are worth what you pay for them, which is usually nothing. There is no one size fits all when it comes to restrictive covenants (non-compete and non-solicitation agreements) A skilled employment law attorney is essential ito ensure your agreement is drafted correctly

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