Noncompete contracts protect your business in a high-turnover job market

In a job market with high turnover rates, noncompete contracts are useful ways to protect your business in industries that are susceptible to damage when an employee brings knowledge of internal operations to other companies. This article is meant to help you decide whether your business would benefit from a noncompete contract for your employees or business partners.

Why draft a noncompete contract?

In a job market with high turnover, noncompete contracts can help businesses that operate in competitive industries with unique processes and products protect themselves from employees who don’t plan to stay with your company long-term.

These contracts can limit the type of work the employee does, the areas in which they can work, and the information they can share. While noncompete contracts have several restrictions, and can’t be excessive, they may give you the peace of mind if a former employee goes to work for your direct competitors.

Most noncompete agreements take similar approaches

The first step of a noncompete agreement is drafting a contract. Generally, whether you have a contract is similar in every state—all contracts between parties must have an offer, acceptance, and consideration. In this scenario, an offer is a noncompete contract, acceptance is the employee’s acceptance, and consideration is generally, employment. While this can become complicated with other contract law issues, those three considerations are the building blocks of every contract.