By: First Union
Does Your Business Need A Non-Compete Agreement 2022
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In simplest terms, a non-compete agreement is a contract that prevents someone from directly competing with your business within a specified time frame and a certain region. When might one be relevant to a small business owner…For instance, if you have an employee quit, a non-compete agreement would thus prevent that employee from starting their own rival company and poaching your customers. Having employees sign non-compete agreements, while it may cost a little extra to have an attorney draft up such a document, could make sense for a lot of reasons.
With a non-compete agreement, you are clearly defining expectations. Employees resign, this happens. If they do leave, they need to know that you expect certain things. Any sensitive information stays with the company; their client relationships also belong to the company. They can't just take off with your customers and private information and set up shop on their own.
You deter others from poaching your employees. You invest time and money into training employees. The last thing you want is for a competitor to woo that employee away. With a non-compete agreement in place, you show competing businesses that you are invested in protecting that which belongs to your company, and in "stealing" an employee, they will not be able to gain access to your valuable customer base.
You instill in your clients greater confidence. If clients think that an employee can just up and quit and thus take private and sensitive information with them, they may be hesitant to sign on with your firm. On the other hand, if they know that they're protected even if say a disgruntled employee leaves, their confidence in you increases.
At First Union, we believe in the power of small businesses. We believe that the teams we've worked with across the nation are strong, determined and on a path toward success. We've learned a great deal from the small business owners with whom we've partnered and hope to continue to do so. If your company needs funds, we would love to be able to help. Call today!