Frequently Asked Questions regarding Non-Compete Agreements

In many ways, your business is your baby. As a business owner, much like a parent, your main focus is on your business' success and overall well-being. You do whatever is in your power to help your business grow and become profitable. A business owner can also spend an equally large amount of time developing strategies to keep a competitive edge against rivals. However, sometimes a business owner spends so much time trying to protect his or her business from outside competitors that he or she forgets about the perils that lie within the company's own doors. Even the strongest and most well-established of companies can be hurt by employees who leave the employer for a competitor or to start his or her own business. One way to protect from such employee actions may be with a covenant not to compete or "non-compete agreement." If you are unfamiliar with this potentially valuable tool, the following information should answer some frequently asked questions.

What is a non-compete agreement or clause?

A non-compete agreement is an umbrella term that refers to various types of agreements between an employee and an employer that attempt to balance the interests between the two sides in the event the employee-employer relationship ends.

What types of non-compete agreements exist?

There are three basic types of non-compete agreements. The first type, which is generally referred to as a non-compete agreement, attempts to balance the interests between employee and employer by restricting the employee's subsequent employment in terms of geography and time. The second type is referred to as a non-disclosure agreement. This type of agreement is suitable to protect an employer by prohibiting an employee from disclosing, to a new employer, protected information that he or she learned while employed with the employer. The last type of covenant not to compete is for non-solicitation. Non-solicitation prohibits an employee from soliciting the employer's customers for a subsequent employer.

Are non-compete agreements enforceable in Kansas?

If drafted properly, a non-compete agreement is enforceable in Kansas, much like any other contract between two willing parties. To determine enforceability, a court will examine a non-compete agreement to determine whether it meets the following requirements: (1) the purpose of the agreement must be to protect an employer's legitimate business interest; (2) the agreement cannot be overly burdensome on the employee; (3) that agreement is not against public policy; and (4) the terms of the agreement are reasonable.

Do I need to hire an attorney to draft a non-compete agreement?

Since non-compete agreements are not automatically enforceable, it is critical to have an experienced Kansas business attorney draft a contract that is specific to the precise circumstances that the employer wants to prevent. A generic agreement that is too general and overbroad will not be he upheld by the courts.

My former employee is violating the non-compete agreement. What should I do?

Upon learning that a former employee has violated the terms of a non-compete agreement, a business owner should contact a seasoned business attorney immediately. The sooner the attorney learns about the breach the sooner the attorney can begin to address the issue. Often, if a situation can be addressed early on, potentially costly and time-consuming litigation can be avoided.

If you have questions as to whether a non-compete agreement can help protect your Kansas business, contact the Hyland Law Firm, LLC, to schedule a free consultation. Kansas City business attorney, Charles Hyland, will take the time to learn about your business and to develop strategies to help safeguard your business from unfair competition. For more than two decades Charles Hyland has provided business clients with exceptional legal services.

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