In previous posts, we looked briefly at some of the important ways businesses can protect valuable information, including intellectual property protections and trade secret protections. Both are useful tools when employed strategically and with the help of an experienced attorney who knows how to make effective use of them.
Another tool that can be used to protect valuable business information is non-competition agreements. These are a bit different from intellectual property and trade secret protections in that they allow businesses to protect their investment in employees who leave the company and attempt to compete either on their own or with another company.
Most states allow businesses to use some form of non-competition agreement, including Pennsylvania. States have different rules concerning the enforceability of these agreements. Some states are stricter than others. In Pennsylvania and in many states, the general rule is that non-compete agreements are only enforceable if they are reasonable in geographical scope and duration, and if they are reasonably necessary to protect a business’ interests. The fine points regarding what restrictions are reasonable and necessary to protect a business are fact-sensitive and vary from state to state.
For businesses, it is important to have a solid understanding of the enforceability requirements for non-compete agreements so that they can craft effective agreements to protect their interests. Working with an experienced business law attorney helps ensure that a business has proper guidance and is able to establish effective best practices around its use of non-compete agreements.