Non-compete employee contracts

Does anyone have their employees sign non-compete contracts? If so, have any of these contracts been challenged at termination legally in favor of either the employer or employee?


  • 6 Comments sorted by Votes Date Added
  • We have in the past, generally with sales people. So far, none have been challenged.
  • I am in banking. We use them with "licensed" associates such as insurance and brokerage. None have been challenged. There are some things you need to watch out for such as the geographic area and how long the non-compete is in force after separation.
  • We use one for our outside sales people, and no one has challenged it yet... but then again, we haven't gone after any ex-employees yet, either.

    One thing I recently added was a statement that "Employee, not Employer, bears full responsibility to abide by any and all competitive agreements that may be in effect between Employee and a previous employer."
  • We might have a sales employee applying for a job at a competitor and he does have a non-compete contract for a year. Not sure where this will head but could get ugly.
  • We have always had them for our sales people. So far, none has been challenged. We tried to make ours narrow so they can go to work in a similar field without directly competing with us.

    We did have one guy take some of our clients with him. We decided not to pursue it because of the negative publicity it would cause. I have always thought it was interesting that the only sales person we ever had steal customers from us is also the only one to ever talk to me about the importance of ethics in sales.
  • A few years back we hired a lender from another bank in a near by city - 25 miles away - we helped her pay the penalty associated with the non-compete agreement that she would not work for a competing financial institution within a certain geo area. This one came back to bite us as she did not work out and did not stay with us very long.
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