Tip: Make Noncompete Clauses Clear and Specific

Restrictive agreements that are too broad may not hold up in court.

Restrictive clauses for employees, whether as a nondisclosure agreement or full-blown noncompete, should be narrowly tailored to improve enforceability and compliance, says Michael Greco, a partner with labor law firm Fisher & Phillips, in The Challenge of Noncompetes.

According to Greco, many cases favor the employee rather than the employer because the restrictive clauses are just too broad or unclear. "You should be able to stand up and tell a judge ‘We were really careful and thoughtful about this so as to not overreach,’” he says.

Although there is no such thing as an ironclad noncompete, making the provisions specific and clear can help the agreement stand up in court, says Greco.

Identifying which competitors are covered by the agreement is one way to make it clear to employees how the agreement will limit them, says Skip DeVilling, president of DeVilling & Associates LLC, a recruiting firm focused on industrial and construction markets. 

DeVilling also says it is important to clearly define restrictions on geography or industry since most U.S. juries wouldn't side with a company that is trying to force someone out of their industry altogether.

Read more about the best practices, as well as the pitfalls, of restrictive clauses in The Challenge of Noncompetes.

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