Pros & Cons Of Non-Compete Agreements

YoungUpstarts

Three of the most valuable assets of businesses are trade secrets, customer relationships and employees. Non-compete agreements can be an effective tool to protect these assets. Non-compete agreements must be limited in time and geographic scope.

Primary Problems with Enforcing Non-Compete Agreements

YoungUpstarts

Businesses often require employees to sign non-compete agreements to protect their business interests. However, just because an employee has signed a non-compete agreement does not make the agreement valid under the law. Non-Compete Time Period.

What about previous company non-competes?

Berkonomics

What is the rule about those pesky non-compete agreements signed upon discharge or sale of the previous company? The good news is that if you were not a significant (usually 5% or more) selling shareholder of a previous company, many states specifically exempt non-compete agreements signed between companies and their employees or minority shareholders. Entrepreneurs tend to remain in the business arena they came from.

Watch out for the gray areas in non-competes.

Berkonomics

Certainly the buyer’s asset purchase documents included a non-compete clause, usually valid for two years from the date of the closing. Separate confidentiality from non-compete, and obey the confidentiality clauses. The non-compete agreement does expire when stated. Some clever buyers try to slip in an unlimited non-compete, and some courts have upheld this. Does the non-compete start anew upon the employee’s departure?

6 Costly Employment Contract Mistakes To Avoid

YoungUpstarts

When you hire others to work for you, employment contracts are vital to outlining what is expected of employees, the terms of their employment, company policies, ownership of intellectual property, and certain financial agreements. Using the Same Contract for All Employees.

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What Do You Do When a Former Key Employee Becomes a Competitor?

Small Business Force

An entrepreneur learns that a former key employee, who left under good terms, has solicited your suppliers and customers with a competitive offering. This was a trusted employee who learned the business at your side; with whom you shared much of the inner workings of the business.

Key Contracts Every Business Must Use

YoungUpstarts

Think about it – when is the last time a business didn’t benefit from having smart employees or strong customer relationships? Even if both parties are sharing information, it is still important to enter into a non-disclosure agreement – in this case, a mutual non-disclosure agreement.

What Start-Ups Need To Know About Employment Law

YoungUpstarts

From hiring your first employees to managing an entire staff, employment law runs the spectrum of employer-employee interactions. Employee Discussions of Hours, Wages or Working Conditions. Some companies even put this policy in writing in their employee handbooks.

Protecting Your Business Idea

YoungUpstarts

Anytime you decide to bring in someone who does not have a stake in your business idea you should have them sign a binding Non Disclosure Agreement or NDA before you tell them or show them a thing. Non-compete Agreements Before and After Hiring.

Protect Your Startup From The 5 Most Common Employment Law Risks

Early Growth Financial Services

Restrictive covenants — Employers often use non compete and non solicitation clauses to retain employees. While non competes are not … Continue reading → Legal Why worry about employment law risks when you have enough things to focus on: building your team, getting traction, and lining up funding? Well, as the adage goes, “an ounce of prevention is worth a pound of cure.”

7 Reasons To Turn The Enemy Into A Strategic Partner

Startup Professionals Musings

Always start with a formal proposal, limited in scope to a specific common objective or technology, for a limited amount of time, bounded by a two-way non-disclosure statement. Every startup has a core competency which should not be shared. Expand core competency and solidify strengths.

Five Legal Pitfalls That Sink Many Good Startups

Startup Professionals Musings

Then they realize that they have talked to many people without signing non-disclosure statements, precluding a patent, or someone else has now beat them to the filing docket. Founders ignore non-compete clauses from former employers.

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5 Startup Legal Shortcuts That Can Be Expensive

Startup Professionals Musings

Then they realize that they have talked to many people without signing non-disclosure statements, precluding a patent, or someone else has now beat them to the filing docket. Founders ignore non-compete clauses from former employers.

How Important Is The Legal Department For A Startup Company?

YoungUpstarts

You have to align your business model to the needs of the market, find competent staff to execute your plans, develop a high-quality product, invest in marketing and set up a corporate network that can boost growth and revenue. – Drafting employee agreements.

10 Steps To Finding The Right Startup Co-Founder

Startup Professionals Musings

Of course, they can outsource part of the work or hire employees, but that approach means more time and money to manage the work, which they don’t have. Use caution to avoid employer conflicts of interest and non-compete clauses.

Five Legal Traps Every Entrepreneur Should Avoid

Startup Professionals Musings

Then they realize that they have talked to many people without signing non-disclosure statements, precluding a patent, or someone else has now beat them to the filing docket. Founders ignore non-compete clauses from former employers.

When is a Startup Non-Disclosure Really Required?

Startup Professionals Musings

Entrepreneurs often get the advice from their lawyers and friends to always get a Non-Disclosure Agreements (NDA or CDA) signed before disclosing anything about their new venture. I recommend a mutual non-disclosure, with a non-compete clause, for protection in both directions.

7 Shortcuts That Can Kill A Startup Business

Startup Professionals Musings

Clarify up front the potential for a conflict of interest or violation of a non-compete clause, and confirm the answer in writing. You may be getting desperate for a cash infusion, assume that money is always green, and forget that every investor is as different as every employee.

7 Ways That Startup Competitors Can Win By Partnering

Startup Professionals Musings

Always start with a formal proposal, limited in scope to a specific common objective or technology, for a limited amount of time, bounded by a two-way non-disclosure statement. Every startup has a core competency which should not be shared. Expand core competency and solidify strengths.

Tough Competitors Are Your Best Strategic Partners

Startup Professionals Musings

Always start with a formal proposal, limited in scope to a specific common objective or technology, for a limited amount of time, bounded by a two-way non-disclosure statement. Every startup has a core competency which should not be shared. Expand core competency and solidify strengths.

How to Start a Non-Emergency Medical Transportation (NEMT) Business

Up and Running

What’s a non-emergency medical transportation business? Josh Komenda , CEO of VEYO, suggests that there’s a large population of those who need non-emergency medical transportation, especially for medically frail or elderly people in rural areas. Image via TechCrunch.

Don’t Ask Known Investors to Sign Non-Disclosures

Startup Professionals Musings

Entrepreneurs often get the advice from their lawyers and friends to always get a Non-Disclosure Agreements (NDA or CDA) signed before disclosing anything about their new venture. I recommend a mutual non-disclosure, with a non-compete clause, for protection in both directions.

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Idea Non-Disclosure Demands Kill Investor Interest

Startup Professionals Musings

Entrepreneurs often get the advice from their lawyers and friends to always get a Non-Disclosure Agreements (NDA or CDA) signed before disclosing anything about their new venture. I recommend a mutual non-disclosure, with a non-compete clause, for protection in both directions.

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Please Vote

Startup Lessons Learned

These policies are not easily categorized as "right" or "left" so they get lost in the din of campaign coverage: abolishing non-compete agreements, portable health insurance, open regulations that allow new business models, open data and government APIs, appropriate bankrupcy laws, patent reform.

Legal Mistakes Every Startup Can Avoid

Startup Professionals Musings

Then they realize that they have talked to many people without signing non-disclosure statements, precluding a patent, or someone else has now beat them to the filing docket. Founders ignore non-compete clauses from former employers.

Startup Non-Disclosure Agreements are Overrated

Startup Professionals Musings

Entrepreneurs often get the advice from their lawyers and friends to always get a Non-Disclosure Agreements (NDA or CDA) signed before disclosing anything about their new venture. I recommend a mutual non-disclosure, with a non-compete clause, for protection in both directions.

4 Stupid Legal Mistakes That Can Kill Your Startup

ReadWriteStart

The first step is to ask anyone who has access to your proprietary knowledge to sign non-compete and non-disclosure agreements before you reveal anything. Lawsuits by unhappy employees can kill a startup before it even gets off the ground.

The Biggest Marketing Challenges for Small Businesses

Duct Tape Marketing

More than 75% of the respondents of this survey had 1-5 employees and serve a mix of local, regional, and national customers. One of the most overlooked sources of leads for any business is the pool of non-competing businesses that serve the same target market.

Crafty Tricks for Maximizing Legal Help

Up and Running

Anyone who has had the need for a lawyer understands the pinch of hiring competent legal help. Have employees? I see businesses every day happily—but unwittingly—doing all sorts of things that could get them sued by an employee, customer, or other business.

The new Berkus SMALL BUSINESS SUCCESS COLLECTION – eBooks and books

Berkonomics

Addressing non-competes and previous employer confidentiality agreements – and much more. Describing your core competency. Employee laws. How to focus your employees on growth.

A Startup Knows It Needs a Lawyer When:

ithacaVC

2. You need (or think you need) a stock option plan: granting stock options (and other forms of equity compensation to employees like restricted stock) should be done under a written equity incentive plan. And each award to a given employee requires a separate grant agreement laying out the terms of the grant. and (v) how to properly fire employees.

Making MA More Competitive – An Innovative Way Around the H-1B Visa Cap

Rob Go

There was great news yesterday in the MA entrepreneurial community when Governor Patrick proposed sweeping legislation to ban companies from enforcing non-compete agreements. It was a really unfortunate tax on the company, and caused him to start building out part of his team in India for a period of time rather than hiring more American employees, which was his preference.

Piercing the Corporate Veil of Sweat Equity

grasshopperherder.com

Some have been as co-founder, most have been as a consultant with the possibility of becoming an paid employee, “as soon as we close our funding round.” Non-compete. I was once asked to sign a one year non-compete agreement as a sweat equity consultant.

The 50 Best Marketing Strategies For Small Business

Mike Michalowicz

Donate several of your products or services to a non-profit organization that is sponsoring a live auction and the proceeds will be donated to the charity. Help Other Employees. Offer employee incentives to various big businesses, or to smaller businesses in your hometown.

One More Time: No NDAs

dashes.com

If I honor your NDA, and I meet a great investor or potential employee or valuable partner for your new venture, I wouldnt be able to tell them about it. The same goes for "non-competes" or non- solicitation covenants. My main qualm with the NDA, like you said, was that non of the ideas covered in the agreement were all that original - things that I had though of while waiting for water to boil and disregarded as not valuable. Anil Dash.

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Everything you ever wanted to know about advisors: Part 2.

venturehacks.com

Or they bring you a handful of great employees. They’ll bring you leads for customers, employees, and investors. Venture Hacks Good advice for startups. Disclaimer: This is not legal advice.

Finding Your Co-Founders

techcrunch.com

Just make sure to not violate any non-competes, etc, in the process! However, nowhere has as many real estate agents, lawyers, accountants, landlords, employees, co-founders, mentors, and VCs all steeped in startup culture as does Silicon Valley.

From Nothing To Something. How To Get There.

techcrunch.com

Also, for the full time coder, you may violate your employee contract especially in the area of non-competes or just plain piss off your boss when he finds out how much time you have been putting into a side project when deadlines were looming. No lying 3 Pitch the technical puzzles attempting to solve 99.9999% of non-technical founders/co-founders get 2 out of 3 of these points wrong.

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