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Employee non-compete agreement policy

Originally Published:
Mar 2017

Don’t let your valuable corporate assets and proprietary information walk out the door when an employee leaves the company. This non-compete agreement defines what knowledge and skills they can—and can’t--take with them if they accept another job.

From the policy:

Employers across many industries often use a non-compete agreement (NCA) to keep company-owned intellectual property from being used elsewhere. An NCA prevents employees who resign from forming or working for competing businesses. While there is nothing wrong with using occupational skills developed on the job (such as system administration or network engineering), a properly framed NCA is intended to prevent ex-employees from profiting elsewhere based on their knowledge of private company information and existing personnel.

Many NCAs serve as contractual agreements to restrict employees, consultants, or other service providers from working within a certain industry sector, and/or for a particular organization, and/or for a specified length of time. Some have been overly restrictive and if enforced, could endanger a former employee’s ability to continue working in their career. The goal of a fair NCA is to protect company secrets and staff, not to limit people’s employment opportunities or punish them for finding employment elsewhere.

Definition of private company information
This non-compete agreement is designed to protect the organization’s business interests and/or proprietary trade secrets, hereby defined as “private company information.” This information can include, but is not restricted to, company processes, customer lists, external contacts, programming or trade secrets, financial histories and projections, product management strategies, marketing campaigns, and other types of confidential, proprietary business data, which if misused or leaked, could cause harm to the organization.

A good rule of thumb to determine which material fits the criteria of private company information is to evaluate whether the information is publicly shared or kept for internal use only. The latter instance quite likely falls under the category of private company information, especially if it is restricted to certain internal personnel.

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