Your recipes and methodologies are the most important assets of your business. If this information is disclosed to third parties, it can lead to financial distress because a competitor could imitate your product line and ruin your brand’s uniqueness and reputation. To try to avoid this issue and other disputes that could arise with former employees, it is critical that employees agree to non-compete and confidentiality agreements to protect your trade secrets and methodologies.
Several factors should be taken into consideration when drafting and negotiating a non-compete agreement to avoid unnecessary time and costs in fighting potentially unenforceable terms. Although every state’s criteria differ slightly, the following factors typically are applied in deciding the enforceability of these agreements: