There is a school of thought and opinion that suggests that non-competes are losing their attractiveness for variety of reasons. Those leading the discussion against the concept of non-competes claim that trade secrets and other intellectual property can be adequately protected with trade secret agreements and restrictions, and that employers are losing out on a significant part of the talent pool because there is a segment, that tends to be more motivated and talented, who will simply pass on employment rather than sign a non-compete. Every employer needs to assess whether there is a need for a non-compete depending upon the business, the business model and the business interests that are to be protected by a non-compete. The best way to protect against customer theft is still, in my view, the non-compete.
One thing employers may want to consider when attempting to sell or entice an employee into a non-compete who is valuable and that they want to retain is to offer that employee a severance in exchange for signing the non-compete. The employer can simply explain that there are significant investments that the employer has made that it wants to protect, but that they are willing pay a severance in exchange for the fact that the employee is unable to participate in that market for a period of time after termination of employment. Employers should understand that the non-compete agreement will afford the employer leverage to obtain a desired level of restriction if the non-compete is signed, even if the non-compete is invalid or subject to partial invalidation by a court, as most of the non-compete disputes end up in a settled dispute rather than in a court decision.
Although there are excellent arguments conceptually that suggests non-competes are overly restrictive in the fluidity of talent within the job market and an undue restriction on what are shorter and shorter employment relationships, the non-compete is here to stay in one form or another. The best non-compete is one that is narrowly tailored to your business, the employee and the easiest to sustain in the event of a dispute at the end of employment. The attorneys at Traverse Legal are experienced in drafting non-compete agreements that are sustainable in court.