Privacy in Business and Company
It goes without saying that privacy (business and company) has become a contentious issue especially at the turn of the 21st Century. Nowadays, it is very common for company executives and employees in general to be poached by rival companies after they have worked for another company for some time. When these employees are poached they tend to divulge critical information and business strategies used by the company. This tends to put the company in jeopardy because all of a sudden the competitors know a lot about them therefore they have a competitive advantage. Another common occurrence is that of top level management starting businesses similar to that of employers as soon as they have resigned. This is often after they have acquired the necessary experience, skill set and resources. They therefore end up being rivals to their employers. It is therefore necessary for competitors to put in place certain measures to safeguard them against such instances (Bünstorf, Engel, Fischer, " Güth, 2013).
The Use of Non-Compete Clauses
One of the most efficient and dependable way that business and companies may employ to protect their privacy is by ensuring that all its employees especially at the management level sign a non-compete clause. A non-compete clause basically refers to a clause in which one party (normally an employee) agrees not to start a similar company or to enter into a similar profession or generally compete with another party (the employer). There are certain requirements that a non-compete clause should meet in order to be considered valid. First, it has to be agreed upon in writing by both parties. Secondly, your employee has to be 18 years old and above. If the employee is underage then the permission of his or her parents has to be sought before signing the agreement. Thirdly, the agreement has to be reasonable in terms of scope, time and geography (Leichter, 2015).
Enforcement and Limitations of Non-Compete Clauses
Most of the time, non-compete clauses are not included in temporary employment contracts. However they may be included in the case of a special circumstance where the interest of the business is at stake. Failure of an employee to comply with a non-compete clause may result on he or she being charged in a court of law (Prasad, 2005).
Businesses should be carefully with regards to non-compete clauses because there are instances where courts may refuse to enforce non-compete clauses. They include; when there is no consideration. Businesses should that they offer their employees some form of consideration (anything of value in return) in exchange for their agreement not to compete. In so doing both parties benefit. The court may also do away with the agreement when it restricts competition for long. Some of these non-compete agreements may commit the employee for his whole life. A non-compete clause lasting for about 6 months is reasonable but that lasting a lifetime may be revoked by a court of law.
Thirdly, the agreement may be unenforceable if it covers an unreasonable large territory. There is a certain geographical location that a business enjoys as its target market. If this location is too extensive then a court of law may disregard the agreement. The agreement may also be disregarded if it does not have a chance of law provision. An agreement enforceable in one state may not apply in another. The business should therefore ensure that it clearly dictates the jurisdiction where its clause is applicable (Srivastava " Gupta, 2016).
Ensuring Protection and Fairness
The key to a non-compete agreement is reasonableness. When deciding on whether to enforce a non-compete agreement the court always strives to protect the interest of both parties. Employers have the right to protect the relationships they have fostered with their target market but former employees also have the freedom and right to earn a living. An employment lawyer should be sought after in case one has an issue with regards to the enforcement of a non-compete agreement.
Strategies to Prevent Information Leak
There are some strategies that companies may employ in order to prevent business executives from leaving your company with proprietary information and join a competitor. The first strategy is to include a non-compete clause in your employee’s contract. When a company has employed a new member of the top level management, they ought to ensure that the employee signs this binding agreement. In so doing the interests of the company will always be protected in the event the employee resigns or leaves.
The second strategy involves ensuring that new employees sign the non-solicitation clause. This is a clause that inhibits or forbids company employees from contacting your client after they have resigned. I think that this is a very important strategy because it is a common practice for these employees who have resigned from the job to go on and poach the company’s target customers. The company is therefore left at cross roads because it has not only lost its employee but also its target consumer.
Thirdly, the business may enter into a mutual agreement with its resigning employee. Most of the time business people are reasonable individuals with utmost respect for one another. A business may therefore humbly request its leaving employee to safeguard its important information and interest. If these employees are humane, trustworthy and appreciate what the company has done for them they simply go on to comply with the company’s request.
The shareholders of the business may also ensure that they divulge only the necessary information that employees require but not everything about the business. In so doing the company will be protected in case an employee shifts allegiance. Businesses should also shuffle their employees from time to time by changing their departments. This will ensure that they do not become specialized in a particular line of work and network. Strategies that ensure the business remains dynamic and adaptable should also be enforced because this will ensure that the business can be able to cope with uncertain future events.
Conclusion
It is crystal clear that in this dynamic world businesses strive to have competitive advantages or an upper hand over their competitors. In order to do so they may employ unscrupulous means such as poaching employees of its competitors. It is therefore necessary for business to ensure that they have put in place measures to protect themselves against such instances. Non-compete clauses, mutual agreements, and non-solicitation are very important strategies that could be employed by companies to protect their interests. As the adage stipulates, prevention is better than cure.
References
Bünstorf, G., Engel, C., Fischer, S., " Güth, W. (2013). Win shift lose stay: An experimental test of non-compete clauses. Bonn: Max Planck Inst. for Research on Collective Goods.
Leichter, P. J. (2015). A bitter pill to swallow: The negative impact of non-compete clauses in physician employment contracts.
Prasad, S. (2005). Non-compete clause: Microsoft sues Google over hire.
Srivastava, Y., " Gupta, K. (2016). Restraint of Trade: Non compete clause in India " UK.
