As a small business owner, you are probably interested in protecting your company’s intellectual property, keeping it from the competition. You may want to consider copyrights, trademarks and patents, depending on what type of intellectual property you’re dealing with.
One thing that business owners sometimes consider is asking their new employees to sign noncompete agreements. If the employee signs, it typically sets restrictions on who they can work for after they leave the job. For instance, they may not be able to go to a competitor in the same geographical area for 12 months after quitting.
Noncompete agreements have been banned
However, while this is a tactic that may have worked in the past, it will not work in the future. Recently, the Federal Trade Commission, issued a final rule banning the use of the noncompetes
If you have employees who have already signed them, they may no longer have to abide by those agreements when the rule goes into effect and they would be free to quit and work wherever they would like. If you are bringing on new employees, you may not want to ask them to sign noncompete agreements – as those agreements may not even stand if you did.
Some large corporations can still use existing noncompete agreements for senior executives. But for small business owners who generally have lower-level employees, along with managers and supervisors, noncompete agreements will be fully prohibited.
This shows how quickly employment laws can change and why business owners need to be able to adapt. Although this rule, is likely to face legal scrutiny when it finally goes into effect, as a business owner, be sure you’re well aware of the many upcoming changes and the legal steps that you need to take.