Non-Compete Clauses In Construction

Non-compete clauses can be common in employment agreements where proprietary knowledge, trade secrets, and client relationships play a crucial role. 

A non-compete clause is an agreement that restricts an employee or subcontractor from working at a competing company or starting a competing business for a specific period of time and within a certain geographic area after leaving their employer in order to protect company trade secrets, prevent client poaching, and reduce direct competition. 

While each state has their own rules and regulations on how, when, and why non-competes are enforceable they all have certain parameters that they have to adhere to:

Reasonable Timeframe: Non-compete clauses can’t extend out indefinitely. While each state has their own rules on how long a non-compete can last, usually it’s not more than a year. 

Geographic Scope: How big is the area that the non-compete trying to cover? State or nationwide restrictions can make it harder to enforce. 

Legitimate Business Interest: The enforceability also takes into consideration of whether it’s truly a company trade secret or if it is just restricting competition unfairly.

Non-competes can be difficult to enforce, but there are still ways you can keep your business safe. 

You can have a:

Non-Solicitation Agreement: This agreement prevents employees or contractors from stealing clients or hiring away workers.

Non-Disclosure Agreements (NDA): NDAs can protect trade secrets and confidential information. 

These can be easier to enforce and keep your business safe.