A Covenant Not To Compete, or a Non-Compete Agreement, is a contract that an employee signs agreeing not to go to work for a competitor or enter into a competing business. A Covenant Not To Compete may also be a condition of selling a business. A part of the value of the company being sold is derived from the transfer of the brand and good will of the business, and a Covenant Not To Compete protects the new owner from losing that value if the original owner opens a competing enterprise.
Covenants Not To Compete can be very important in protecting customer relationships, trade secrets and proprietary information. Many business enterprises can benefit from the use of a Covenant Not To Compete, if the Agreement is carefully drafted so the Arizona courts will enforce it. An experienced Scottsdale Arizona business law attorney at Lotzar Law Firm, P.C. can help you to determine if a covenant not to compete in Scottsdale and throughout Arizona is helpful to your business and can assist in both writing and enforcing a Non-Compete Agreement. Call today to learn more.
Is a Covenant Not to Compete Necessary?
A Covenant Not To Compete may be needed if you are trusting any employee with information that you would not want provided to your competitors. Examples of situations where a Non-Compete Agreement would be a good idea to protect proprietary information include:
- When your business has a direct competitor who would benefit from hiring your workers.
- When an employee of your organization is developing materials for the company intended to be Patented, Copyrighted or Trademarked.
- When an employee is given access to trade secrets or to confidential customer information.
Non-Compete Agreements are also important in situations where your workers may form close relationships with individual clients or when clients would come to trust the employee rather than the brand. For example, a massage therapist or a physical therapist may be asked to sign a covenant not to compete so that he or she does not leave an employer and take all of his customers with him. It is very common for Non-Compete Agreements to be used in the medical or other professional services industries where clients may interact frequently with the same business employee.
Whenever a Non-Compete Agreement is needed, it must be reasonable in scope of work, in geographic area, and in duration for the court to enforce the Agreement. Lotzar Law Firm, P.C. can help you to draft a Covenant Not To Compete in Scottsdale that is likely to be upheld in court and can advise you on the type of protections you need to secure your business interests. Call or contact us online today to speak with a member of our legal team and to learn how we can assist you.
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