If you run a business, you might have heard of non-compete agreements. Non-competes bind employees from revealing or using sensitive information they acquire from the companies they work for. In the process, non-competes protect businesses from unfair competition. However, employers do not always require all their workers to sign a non-compete agreement.
As Chron explains, employers can require a number of parties to sign a non-compete agreement. They can have their own employees sign a non-compete. They may also require independent contractors working with the company to sign a non-compete clause. In addition, business partners or business clients may enter into non-competition agreements.
However, not all workers, contractors or clients need to sign non-compete agreements. The only people who generally need to sign them are individuals who will come into contact or have the potential to come into contact with sensitive information. So depending on where in a company hierarchy workers perform their duties, only some may need to sign a non-compete while others may not.
Ensuring that only necessary parties sign non-compete agreements may benefit a company. Non-competes place a number of restrictions on a worker, like barring the person from going to work for particular companies, revealing confidential information to another party, or using sensitive information while starting up a business. Non-competes also contain time durations to bind the person to the agreement.
However, non-competes might restrict a person too much or they may restrict the wrong person. Workers who feel pressured into signing a non-compete without a good reason may litigate the agreement in court, forcing the company into potentially costly litigation. A judge could even strike down the agreement if the judge finds the compact is not fair and does not serve a legitimate business interest in restricting an employee.