Non-Compete Agreement

non-compete agreement

What Is A Non-Compete Clause?

A non-compete clause is a legal agreement that restricts an employee from taking a job with another company in the same industry for a specific period of time. A typical term would be two years, but it can differ depending on your province and the competition in an industry. 

A non-compete clause restricts an employee from competing with their employer for a certain period of time following the end of employment. These clauses are often included in employment contracts, but they can also be agreed upon through negotiation. They’re often considered necessary to protect trade secrets or confidential information, but some employees feel like these agreements unreasonably restrict their freedom. It’s important to know your rights as an employee before signing any agreement with your employer. 

Interested in learning more about how non-compete clauses affect you? Get a free consultation with Canada Business Lawyers today.

Non-compete clauses are often used by companies who want to protect their investments and customer base from competition coming from former employees. Some provinces have stricter laws against non-competes than others, so it’s important for business owners to be aware of what is allowed where they operate. 

  • Information To Include In A Non-Competition Agreement
  • The specified dates including start and finish
  • Provide a reason for discretion
  • Outline reasonable limitations and justification for them
  • Consequences and jurisdiction if broken

What Does A Non-compete Agreement Protect?

Prevents employees who are privy to valuable trade secrets or proprietary information.

  • Products
  • Services
  • Finances
  • Marketing plans
  • Customers
  • Pricing
  • Or other confidential matters

The term “non-competes” does not apply only to businesses; it applies to anyone who has signed something similar like a lease agreement for property or other kinds of legal contracts. Usually in employment contracts forbid an employee from working for any other company or starting their own business within the same industry. This is to protect companies with trade secrets and intellectual property from being stolen by previous employees. However, in some cases non-competes can be found to be unlawful and unenforceable if they restrict the former employee’s ability to find new work after termination of employment due to a lack of geographic limitations on where the former employee may work.

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