gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not

Former employees and business associates become competitors every day.

When hiring others to work on your team, be mindful that employees and contractors might:
- Leave and start a competing practice;
- Go to work for a competitor;
- Solicit your clients; or
- Use and/or disclose company confidential information.

So, how do you reduce the risk of training your future competitors?

The best business relationships are grounded in trust and mutual benefit. Many people work on a handshake understanding, which is fine until something goes wrong. A little paperwork on the front end can prevent problems down the road. But, all the paperwork in the world won’t prevent someone from leaving. So, to retain key people, they need to feel that this situation is a “good fit” for them.

Tip: Be fair and reasonable about your terms and compensation. Recognize and reward the contributions of high-performing employees and contractors.

The following documents can be used to protect your interests. Your agreements should be reasonable and use plain English (avoid legalistic boilerplate!). Being heavy handed in your agreements may actually be counterproductive.

(1) Non-Compete Agreements

Requiring employees and contractors to sign 'non-compete' agreements is a common practice. Unfortunately, the enforceability of non-compete agreements is often unclear.

The basic rule is that non-compete agreements will be enforced if they are:
- Fair and reasonable (in scope, duration & geography);
- Protect legitimate business interests; and
- Do not impose substantial hardship (preclude a person from earning a living).

What is fair and reasonable? It’s a legal concept that gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not a

lationships are grounded in trust and mutual benefit. Many people work on a handshake understanding, which is fine until something goes wrong. A little paperwork on the front end can prevent problems down the road. But, all the paperwork in the world won’t prevent someone from leaving. So, to retain key people, they need to feel that this situation is a “good fit” for them.

Tip: Be fair and reasonable about your terms and compensation. Recognize and reward the contributions of high-performing employees and contractors.

The following documents can be used to protect your interests. Your agreements should be reasonable and use plain English (avoid legalistic boilerplate!). Being heavy handed in your agreements may actually be counterproductive.

(1) Non-Compete Agreements

Requiring employees and contractors to sign 'non-compete' agreements is a common practice. Unfortunately, the enforceability of non-compete agreements is often unclear.

The basic rule is that non-compete agreements will be enforced if they are:
- Fair and reasonable (in scope, duration & geography);
- Protect legitimate business interests; and
- Do not impose substantial hardship (preclude a person from earning a living).

What is fair and reasonable? It’s a legal concept that gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not

ensation. Recognize and reward the contributions of high-performing employees and contractors.

The following documents can be used to protect your interests. Your agreements should be reasonable and use plain English (avoid legalistic boilerplate!). Being heavy handed in your agreements may actually be counterproductive.

(1) Non-Compete Agreements

Requiring employees and contractors to sign 'non-compete' agreements is a common practice. Unfortunately, the enforceability of non-compete agreements is often unclear.

The basic rule is that non-compete agreements will be enforced if they are:
- Fair and reasonable (in scope, duration & geography);
- Protect legitimate business interests; and
- Do not impose substantial hardship (preclude a person from earning a living).

What is fair and reasonable? It’s a legal concept that gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not

s a common practice. Unfortunately, the enforceability of non-compete agreements is often unclear.

The basic rule is that non-compete agreements will be enforced if they are:
- Fair and reasonable (in scope, duration & geography);
- Protect legitimate business interests; and
- Do not impose substantial hardship (preclude a person from earning a living).

What is fair and reasonable? It’s a legal concept that gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not

gets interpreted differently in different industries and locations. For example, a reasonable term for a non-compete in a traditional company may be one year. For Internet companies, the reasonable term may be 6 months or less because the technologies and markets are changing so quickly.

Tip: Non-Compete Agreements -- Less restrictive is more effective.

Using a boilerplate agreement, “one size fits all situations” is not a good approach. You are usually better served by tailoring an agreement to the specific employee/contractor and identifying the specific business interests that you are protecting (e.g., customer confidential information). The courts are showing a trend of enforcing less restrictive non-competes and not enforcing broad, boilerplate agreements.

(2) Non-Solicitation Agreements

With a non-solicitation agreement, you can protect your legitimate business interests without unduly restricting an employee or contractor’s ability to earn a living. Non-solicitation agreements are more easily enforced than broad-based non-compete agreements.

Tip: Add non-solicitation provisions to your agreements, such as:

“You agree not to divert any business opportunities from the Company to yourself or to any other person or business entity.“

“You also agree that for a period of one year following termination of this agreement, that all clients to which you were introduced by Company shall be considered Company clients and that you will not pursue or accept any additional work with those clients without written permission from Company. In the event that you violate this provision, you agree to pay Company 20% of your first year billings to Company’s clients.”

(3) “Assignment of Rights” for employees

Usually, employment terms provide that an employer owns the rights to works produced by an employee. The employee is the inventor (patent) or creator (copyright) and it is important to have a clear assignment of the employee’s rights to the employer. Without such assignment, inventions of the employee belong to the employee, even though the employee developed the invention during work hours and using the employer’s ma