Information is more important to companies today than ever before, as a single algorithm can make the difference between a business making hundreds of millions of dollars in the next year or dissolving. Employers will zealously guard this valuable information from competitors at all costs, even if it means that fortune 500 companies lose $31.5 billion per year because they fail to share information, according to International Data Corp. One of the methods that is typically used to protect information from a competitor is a non-compete agreement, which prohibits the employee from spilling the company’s secrets to a competitor who would gladly pay, or provide a high paying job to, the former employee in return for said information. A non-compete agreement places heavy financial incentive to keep the employee from gaining employment with another competitor, both by providing a financial incentive and by placing a financial deterrent.
The Severance Package
Non-compete agreements may be part of a severance package, which may place additional requirements on the employee after leaving the company. However, there is typically an incentive for the employee to carry through with these obligations, such as severance pay. By violating the terms of a severance package, the former employee may lose those benefits as well as risk being targeted in an expensive lawsuit.
How Non-Compete Agreements Work
A non-compete agreement protects information that the employee learned about or discovered during his or her employment, by not allowing the employee to go to a competing company to work. Your employer may have spent a lot of time and money investing into your job training and education, as well as a lot of resources supporting the information that you worked with and created during your employment. A non-compete agreement ensures that you do not go off to another competing company after your employer has invested so much into you.
Overly Restrictive Terms
Some non-compete agreements are too restrictive and will damage an employee’s ability to earn a living if and when he or she decide to leave an employer. Working closely with an attorney is an important aspect of coming to a mutually beneficial agreement. An attorney can help you redraft the non-compete agreement and send it back to your employer with more reasonable terms that do not threaten your future, such as not allowing you to seek employment in your field for 10 years. Non-compete agreements are not reserved only for those working in cutting edge technology fields. The Supreme Court of Missouri found that the stipulations in a non-compete agreement that barred a security officer from working in his field for two years was unreasonable.
An HKM Employment Non-Compete Attorney is Here to Help Today
Whether your current employer is asking you to sign a non-compete agreement, or you are about to take a new job that requires you to do so, you first need to talk to an experienced employment lawyer. The St. Louis HKM Employment Attorneys can help you to better understand exactly what the contract says, and assist with modifications if necessary so that your future is not jeopardized by overly harsh terms. Reach out to our attorneys today.