Creating A Non-Compete Clause And How To Gather Evidence For The Clause Violation

by Tyler P. A Passionate Blogger - Entertainment

If you are starting up a business or are a successful businessman, you will always face the risk of having your employees quit and start up their own businesses similar to yours. Besides, they may also choose to move to your competitor after getting carved from daily operations. When an employee signs a non-compete agreement, they state that they agree not to compete with their employer once their business relationship ends. Not many people are conversant with how the non-compete clause works. If you have confidential information such as client lists or other unique business processes, you may ask your employees to sign a non-compete clause to ensure that even if they leave the company, they will be restricted from competing with you in certain ways.

How To Create A Non-Compete Clause

Employers who seek restrictive covenants do so to avoid key employees from resigning and forming competing entities. Thus, no one wants to have agreements that are not enforceable in court, those agreements that one cannot hold an employee accountable for any breach of terms signed. Coming up with a non-compete clause in Nsw requires one to have some legal advice. The reason is that no court will allow an unnecessarily restrictive non-compete clause to be used on employees. To come up with an enforceable non-compete clause, you may consider the below:

· Be conversant with your state law on treatment for non-compete clauses: Many business people or traders don’t know the laws of their state. If unsure of how employees are to be supported regarding these clauses, it’s better to consult with a business lawyer. Such a lawyer will be up to date with the trending laws relating to contract provisions.

· Make consideration: Non-compete clauses are allowed in Australia. However, any agreement without consideration is not legally enforceable. For instance, if an employer requests an employee to sign the clause after they have started working, then the clause must contain an additional consideration such as a promotion or pay raise.

· Make a reasonable clause: Any non-compete clause may be reasonable. You have to analyze the duties of each employee you request to sign a non-compete clause. Meaning, the clause should be for those who can access your confidential information. Such will stop employees from taking your trade secrets.

The key thing to have a non-compete clause in Nsw is to make sure they are reasonable and not limited. In such a way, employees will not have concerns about the non-compete clause you ask them to sign.

What If There Is a Violation Of Non-Compete Agreement?

It has become increasingly common for any business owner to have a restraint of trade in Australia. That's why it’s better to get advice on the non-compete clause as early as possible. An employer has to protect his/her trade secrets or sensitive company information. The main question is what happens when a non-compete clause is put to the test. If you have learned that one or more of your employees are working for a competitor, you should conduct your own investigations by:

· Evaluating whether the employees violate the non-compete clause

· If so, gather evidence to be used if you decide to pursue legal action.

Non-compete litigations are very expensive. As an employer, you should act quickly as soon as you come to terms with the violations. However, you have to ensure you have factual and legal support to better position yourself to obtain the right legal enforcement for you to file a claim. If you want a smooth restraint of trade in Australia, you should consider seeking legal advice on employment competition issues from experienced business lawyers.