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Non-competitive contract

2020-08-18 来源: 51Due教员组 类别: Essay范文

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下面为大家整理一篇优秀的essay代写范文 -- Non-competitive contract,文章讲述“非竞争”协议是一项合同条款,其中,员工同意在解除雇佣关系后不与他或她的雇主竞争或为竞争对手工作。此类协议可以是初始雇佣合同或遣散合同的一部分,也可以是其在雇佣过程中单独订立的协议(Johnson,2012)。更具体地说,它是一种“限制性契约”。

Non-competitive contract

A “noncompete” agreement is a contractual provision in which an employee agrees not to compete with his or her employer or work for a competitor after termination of the employment relationship.  Such an agreement may be part of an initial employment contract or a severance contract, or it may be its own separate agreement entered during the course of employment (Johnson, 2012). More specifically, it is a kind of “restrictive covenant”.  For example, it can be deemed as a promise by an employee not to participate in some behaviors that is opposite to the employer’s interests. A covenant “not to compete” generally is a promise that the employee will not engage in business competitive with the employer during and for a certain time period following termination of employment. Also, such covenants are often accompanied by covenants “not to solicit” the employer’s customers and covenants “not to disclose” the employer’s confidential business information.

In order to be enforceable, it is necessary for a noncompete contract to meet some requirements.  In a other word, the well-recognized test for the “reasonableness” of a noncompete agreement considers these factors .Firstly, it is necessary to protect certain employer interests. Secondly,   time and scope should be reasonable rather than unlimited. Thirdly, it is the consistence with public interest. Finally, it should be supported by consideration. The main consideration in determining whether a noncompete agreement is enforceable is whether the agreement reasonably balances the employer’s legitimate business interests with the employee’s freedom to choose his or her employment.  Interests that justify enforcement of noncompetes include protecting the employer’s overall business and good will and guarding the employer’s confidential information such as trade secrets and customer lists (Johnson, 2012).. 

Market position and reputation included, goodwill encompasses all kinds of intangibles. Confidential business information encompasses commercially valuable information that is not generally known outside of the company; therefore, the companies would like to use many reasonable measures to protect it to protect the value of such information.  Unless good will or trade secrets/confidential business information is at stake, it is not allowed for an employer to keep an employee from leaving to go to a competitor. In other words, noncompetes can be used to avoid some unfair competitions (involving misappropriation of good will or confidential business information) but not ordinary competition.

It is important to consider whether the agreement reasonably balances the employer’s legitimate business interests with the employee’s freedom to opt his or her employment while determining whether a noncompete agreement is enforceable.  It is justified to believe that the interests that justify enforcement of noncompetes include protecting the employer’s overall business and good will and guarding the employer’s confidential information such as trade secrets and customer lists. 

Noncompetes must be reasonable in duration and geographical scope. Time and geographic restrictions are generally enforced only the extent they are necessary to protect the employer’s legitimate business interests. Employers are at risk if they draft agreements in broad terms and presume that a court will enforce them on a scaled back basis. Thus, whether a restriction is “reasonable” will often vary based on the employer.   In one decision, the Minnesota Supreme Court described a reasonable time restriction as either “the length of time necessary to obliterate the identification between the employer and employee in the minds of the employer’s customers, [or] the length of time for an employee’s replacement to obtain licenses and learn the fundamental of the business.” ( Barnes-Brown & Pendleton, 2014)

Furthermore, another factor affecting enforceability ---whether or not the noncompete agreement is also very important and it is supported by consideration—that is, whether the employee could obtain some interests while exchanging for the promise not to compete. That is to say, once consideration for a noncompete agreement is displayed, courts would not evaluate the efficiency of the consideration, because it is free for parties to enter an agreement based on whatever terms they see fit. Moreover, no consideration is required beyond the offer of employment when a noncompete agreement is part of the initial employment contract. However, when a noncompete is signed during the period of employment, something more than continued employment, such as promotion, greater responsibility, or increased job security, is necessary in most cases. 


It is necessary to evaluate the employers expeditiously whether the employee’s job with a competitor threatens the employer’s goodwill, trade secrets and/or confidential information. It is impossible for employers to sit on their own rights in these situations. This is because any delay may hinder the employer’s ability to obtain legal protection which seems to be damaging. More importantly, some significant question should be asked by themselves before determining its response. For example, they should be doubtful weather the former employee’s new employer or new business venture competitive and weather the former employee’s activities ill breach one or more of the restrictive covenants contained in the agreement. Employers should also ask departing employees to verify that they are not keeping any company property or documents that contain confidential or proprietary business information.

 

A departing employee should be questioned about future plans so that the employer can learn if the employee intends to work for a competitor and what activities the departing employee will perform for the new employer, or whether the departing employee intends to start a venture that may be competitive with the former employer( Barnes-Brown & Pendleton, 2014) .That is to say, the employee’s misrepresentation may well opposite him or her if a departing employee does not admit going to work for a competitor but then does so.

 

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