Over the past year we’ve seen more and more lighting companies (usually manufacturers) including a non-compete with their offer to the candidate and more companies attempting to enforce a non-compete. If you’re considering adding a Non-Compete clause to your company’s offer letter, here are three things to be aware of if you’re considering adding a Non-Compete clause to your company’s offer letter:
Limit the period of coverage. We’ve seen non-competes range anywhere from 6 months to 3 years (rare). The longer the non-compete, the more protection you have. However, most candidates will balk at signing and most likely bolt for one of your competitors.
- Don’t make it too broad. Most courts don’t support agreements appearing to attempt ‘indentured servitude’. And most strong candidates, if they feel it prevents them from obtaining a position in our industry should they leave your company, will opt not to sign. Limit it to key strategic and/or direct competitors.
- To compete or non-compete? Do you really need a non-compete? Many times a company is served better by a non-disclosure agreement/clause than a non-compete, and most candidates will not have a problem signing a non-disclosure.
When talented professionals are in greater demand than ever, does it make sense to ‘scare off’ talent? Keep in mind if you lose talented professionals because they are not comfortable signing your non-compete, they will usually go to a related company in your industry/product niche. Make sure that your non-compete is protecting you, not preventing you from hiring the most talented professionals. For the complete version of this article, please visit http://pompeo.com/Blog