When you own a small business, every aspect of your operation feels critical to your success, but perhaps none so much as your most-valued employees. Smart entrepreneurs invest in their staff, both by making sure that they are well trained and have all the tools they need to do their jobs, but also in working to keep them happy. Unfortunately, there are times when your best efforts at employee retention are unsuccessful, and workers choose to leave. That’s when you face your worst nightmare: the possibility that they will go directly to an employer, carrying their success — and your profits or secrets — with them. The best tool to guard against this is an enforceable non-compete agreement.

Some people believe that non-compete agreements are ineffective because they can’t hold up in court, but that is not true. The key to having an enforceable non-compete agreement is for the goal to be the protection of your business rather than keeping your employees from being able to earn a living. In order to accomplish this, small business owners need to be careful in the language contained within these agreements, making sure that the terms that are included are reasonable and highly specific. Here are some helpful tips:

• Don’t be overly restrictive in your language – If the restrictions you place on your former employees are viewed as unreasonably strict, you are more likely to see it struck down. Where it may be considered reasonable to keep higher-level employees from working in the same industry or for a competitor, the same is not true of lower-level employees. Similarly, if your language restricts the area in which a former employee can do business similar to yours beyond the geographic area in which you do business, your terms may be viewed as being punitive. You may hope that a judge will simply modify that part of your agreement, but they may throw the whole thing out.
• Include terms specific to your situation – Whether this means making restrictions specific to your industry, your business, or employee, you can’t keep a former employee from ever working or being successful again, and you can’t restrict them from using their talents or intelligence. You can, however, specify that they can’t use your trade secrets, specialized knowledge or existing client list in a new job.

The best way to ensure that a non-compete agreement for your small business is enforceable is to have it drafted by an experienced business attorney. Contact us today to set up a time to meet and discuss your needs.