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Slinde Nelson

Avoid these common non-compete agreement errors

On Behalf of | Jun 28, 2022 | Contracts

When drafted with care and forethought, a non-compete agreement should help protect your Oregon business in the event that someone who works for you leaves and tries to work for a competitor. However, if you fail to take proper care when drafting your non-compete, it may not hold up in court.

According to the National Law Review, making certain mistakes when it comes to your non-compete agreement could result in a court deeming it unenforceable if you find your business involved in litigation. Some non-compete agreement errors are more common than others, and the following are among them.

Making every employee sign them, regardless of role

In most cases, an employee needs to have certain job duties to make having him or her sign a non-compete agreement necessary. Unless your employee has close client relationships, specialized skills or access to proprietary business information, he or she probably does not need to sign such an agreement. Making him or her do so may hurt the enforceability of the contract.

Making the restrictions too harsh

You may also find that your non-compete agreement does not hold up in court if you restrict an employee for too long of a time period, or if you make the restrictions you include in the agreement too broad in scope. In general, your non-compete agreement has to be reasonable to be enforceable. It may hurt you in the long run if you try to restrict your employee for longer than he or she might pose a reasonable and realistic threat to your business.

Ultimately, a strong non-compete agreement is one that protects your business without imposing unreasonable restrictions on former employees.