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9 Ways Businesses Can Ensure Their Non-Compete Agreements Are Enforceable

A non-compete agreement is an effective way for a business to protect its intellectual property, client information, and other confidential information. It generally restricts an employee’s ability to work for a competitor or to start a competing business following that employee’s departure from his or her former employer. For a non-compete agreement to be effective and serve its purpose, however, it must be enforceable. These agreements are generally governed by state law. In New Hampshire, the law that applies to non-compete agreements has evolved over time. Certain types of employer-friendly agreements (and the restrictions they contain) used to be enforceable in New Hampshire. But over the past 10-15 years, the law has trended in the other direction and become more employee-friendly. This does not mean, however, that businesses cannot continue to protect their interests. They can certainly do so. They just have to ensure that they take certain steps to craft a non-compete agreement that adheres to recent trends. Below, I identify and explain 9 ways businesses can ensure their non-compete agreements are enforceable. 9 Ways Businesses Can Ensure Their Non-Compete Agreements Are Enforceable 1) The Non-Compete Agreement Should Generally Restrict the Employee From Soliciting Current Clients, Not Prospective Clients New Hampshire courts generally disfavor non-compete agreements because they restrain free trade and markets. However, they will enforce these agreements if they protect a “recognized legitimate employer interest.” Courts have found that a legitimate interest that businesses may protect is their current client base. This makes sense because businesses should be able to prevent employees from taking advantage of the goodwill and relationships they develop with customers and clients....

5 Reasons A Business Should Sue A Former Employee Who Violates A Non-Compete Agreement

Many businesses require their employees to sign a non-compete agreement or covenant not to compete either upon their hiring or as a condition of continued employment.  A non-compete agreement generally places certain limitations or restrictions on a former employee’s ability to work for a competitor or to start a competing business following that employee’s departure from his or her former employer.  There are often specific guidelines on how these non-compete agreements must be presented to employees.  (In New Hampshire, for example, businesses must present their employees with the non-compete they are required to sign either with an initial job offer or an offer of a change in job classification.) When an employee leaves his or her employer and takes a job with a competitor in violation of his or her non-compete agreement, a business often believes it has a difficult decision to make: sue the former employee and spend money on attorney’s fees, or save the money and risk that the employee harms the business’s interests by working for a competitor. This choice, however, does not have to be perceived as a no-win situation. Rather, a business should use these situations as opportunities to protect its interests and bottom line.  Although it may sound harsh to sue an individual who is merely looking for a job, or seek a temporary restraining order or injunction preventing that person from working for a competitor, the reality is that today’s market is a competitive, cutthroat environment.  A competing business will look for every advantage possible, including poaching an employee whose talent will strengthen its performance and whose absence might weaken his or her former...