Non-compete agreements, which are also called covenants not to compete (CNC), are common in upper level employment contracts. By signing this kind of agreement, an employee is essentially agreeing not to leave his or her job and go into direct competition against the employer. This is a reasonable request in many fields, where a former employee can use trade secrets or customer contact information against his or her former employer.
Unfortunately, many complications can arise when businesses try to enforce these contracts. Different states have different laws concerning when these contracts are valid and how they apply. If you are planning to include non-compete clauses in your business’s employment contracts, you need a clear understanding of your rights and responsibilities under the law.
To learn more, call the Des Moines business lawyers of LaMarca Law Group, P.C. at (877) 327-2600.
When can Non-Compete Agreements be Enforced?
Under Iowa law, a covenant not to compete can be upheld if a court determines that:
- It is necessary. A CNC is considered necessary if the employee is given privileged information that could be used to lure customers away from the business. This information can include extensive training, formulas, and information about individual customers.
- It is not unreasonably restrictive. In the past, some businesses have abused CNC’s to prevent former employees from finding any job in the same field. Today, the burden is on a business to show that its non-compete agreement is fair and not too far-reaching.
- It does not harm the public interest. This last requirement does not come up in business contract disputes very often. However, if a court determines that enforcing a CNC would somehow harm the general public, they may decide not to do so.
When resolving a non-compete agreement case, courts do not have to choose between enforcing all or none of the contract. Our state’s laws allow partial enforcement, meaning the court will uphold the agreement to the extent deemed necessary.
Contact a Des Moines Business Contract Attorney
Negotiating fair arrangements between businesses and employees can be very difficult. To learn about avoiding long and expensive business litigation, contact the Des Moines non-compete agreement lawyers of LaMarca Law Group, P.C. at (877) 327-2600.