NewsLetter for Monday March 24th, 2003

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Pemberley Collection™ Pillow Covers. The excitement of the Mediterranean influence is carried forward with this beautiful red pillow cover. The shimmering gold thread weaves it’s magic through this design and is complemented with red satin fringe piping. Made of cotton chenille, this set of two each measures 153/4" square. Retail $37.95
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From the inlaid semi-precious stones, representing the countries of the world, to the deep blue sea, this Kassel™ Small 220mm World Globe stands 15" tall and will bring attention and beauty to your home. Features a light gray, three-legged stand with ball feet. Presentation samples of each of the semi-precious stones is included.  Retail $499.95
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Giovanni Navarre™ "Italian Stone Design"™ Genuine Suede Leather Jacket. Ladies and gentlemen take a step forward in this fashionable tan, leather jacket. This beautiful genuine suede jacket breathes naturally and can we worn year ‘round. A wardrobe must. Size Large. Available in sizes M-3X.  Retail $59.95
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Write a Reasonable Noncompete Agreement

By Stan Soper

Many employers, especially in the high-tech arena, require employees to sign noncompete agreements to protect valuable trade secrets when employees move to another firm or start their own companies.

If you're considering this practice, or already doing it, do not assume your agreements are ironclad.

Courts carefully examine the language of noncompete agreements as well as the circumstances under which they were signed to determine if they are enforceable.

As an employer:

Use careful wording. Don't just copy a form you find — tailor the noncompete agreement to match your industry, your business and the types of employees you have. An attorney can help you create a form that will work for your business.

Choose appropriate circumstances. Don't just give the form to your office manager to have everyone sign. The agreement should be signed as a condition of receiving a tangible benefit, such as an employment offer, the first day of work, or a raise or promotion.

Enforce consistently. If one employee leaves and violates the agreement, and you do not attempt to enforce it, other employees may decide that you are not serious about the agreement. If it is worth the effort to get the agreement signed, it is probably worth spending some money to enforce it.

Noncompete agreements are only enforceable if they are reasonable. This depends on the individual circumstances of each case. Consider:

  • Breadth or scope of the agreement.
     
  • Time frame.
     
  • Geographic restrictions.

An agreement may be unreasonable if it is so broad it prevents the employee from earning a living. The agreement should only prevent the employee from working in the same line of business within a certain geographical area, or from working in a business in which your secrets might be disclosed.

If you own an engineering firm, you probably cannot prevent employees from working for a residential architectural firm — unless you can show that these firms compete with you.

Some courts have ruled that a noncompete agreement cannot be enforced if it is broad enough to prevent employees from working in the only trade they know.

 

Article Continues below...

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Continued...

Know Your Limits

Agreements may be unreasonable if they last too long.

Courts typically consider a restriction longer than five years unreasonable. However, the application of this rule depends on the facts of each case, which is why many employers now opt for shorter noncompete periods, from one to two years.

If an employee has been employed under a noncompete agreement for a short period, courts may use that period as a measure of how long the agreement should be.

The geographic area covered should not be too large. Courts examine the nature of the employer's business to determine a reasonable geographic restriction.

A local business cannot geographically restrict an employee from starting a competing business in a different town. However, in some cases, a broader geographic restriction might be appropriate.

For example, a 100-mile restriction in a disc jockey's noncompete agreement might be reasonable if the disc jockey's employer had a 100-mile broadcast range.

What to Do, What to Do

If you believe an employee has violated a noncompete agreement, you can go to court to prevent the employee from competing with the company.

Options typically include an order to prevent the employee from violating the agreement (known as injunctive relief) or to award money (damages).

Remember, a judge will carefully scrutinize the noncompete agreement and the circumstances under which it was signed to determine which parts are enforceable.

If a judge doesn't like what he sees, he may throw the agreement out or, in some cases, rewrite the restrictions to be more reasonable.

 


The views of our authors don' t necessarily reflect the views and policies of this company or its advertisers.


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