Businesses in certain industries often ask employees to sign non-compete agreements as a part of the hiring process. These agreements restrict employees from working in similar industries or for companies that are in direct competition with the business once workers have terminated their employment with the company. If an employee should quit and go to work for an opposing company, they may share information that could hurt their current employer. Non-compete clauses are implemented as a way to keep trade secrets and other company information private.
Some employees argue that by signing a non-compete agreement, they are essentially giving away their right to work in the industry should they get fired or lose their job. Although their work experience and skill set may be focused in one industry, they are not able to pursue employment in that industry and are forced to look elsewhere, even though the jobs may pay less or cause them to relocate. In some cases, that may be the only job they know how to do. Once a non-compete agreement is signed, they are not able to perform at that job anymore if they are terminated.
Although non-compete clauses can protect a company from losing experience, research and information, businesses must make sure they are complete and accurate to ensure they are enforceable. The clauses must include the reason for the agreement, a date on which the document begins, the time period in which the employee is prohibited from working for the competition and details on what will happen if the agreement is broken.