An employer may require an employee to agree not to compete with the employer should the employee leave the company.  Such an agreement, referred to as a covenant not to compete, typically restrains a person from engaging in a competing business with a former employer within a certain geographic area for a specified time period.  Other restrictive covenants may permit former employees to continue to work in the industry, but may restrict their ability to solicit, or do business with, customers of their former employer.

Given the current financial crisis, some employers may now aggressively enforce non-compete agreements that they would not have pursued in a better economy.  In addition, some employers may seek to enter into non-compete agreements with more employees.  Dallas employment lawyer Keith Clouse believes this may not be the best course of action.  As Mr. Clouse explains, senior executives with access to secret company information should likely be bound by a non-compete agreement, however, a company that enters into non-compete agreements with lower-level employees may diminish the overall value of its agreements with its senior executives.

A better option for lower-level employees may be a confidentiality agreement.  A confidentiality agreement, or non-disclosure agreement, requires an employee to agree not to disclose a company’s trade secrets or confidential information.  Oftentimes, a confidentiality agreement provides the most benefit to both employer and employee; the employer’s information is protected and the employee is free to compete with the employer.

If you would like to speak to an employment law attorney about a non-compete agreement or a confidentiality agreement, contact the employment lawyers at Clouse Dunn LLP at info@cdklawyers.com.