Pros & Cons Of Non-Compete Agreements

YoungUpstarts

Non-compete agreements can be an effective tool to protect these assets. Under the right circumstances and when properly drafted and implemented, non-compete agreements are enforceable in Florida. However, one size does not fit all when it comes to non-compete agreements, and there are pros, cons and limitations to their use. A competitor who hires an ex-employee under a non-compete can become liable for what is known as tortious interference.

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. As a prerequisite to non-compete agreements being enforceable in Florida, such agreements must be designed to protect a “legitimate business interest”. Non-Compete Time Period.

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What about your previous company non-compete?

Berkonomics

Rules about non-compete agreements . So, what are the rules about those pesky non-compete agreements signed upon your discharge, or upon the sale of your previous company? The good news is that if you were not a significant (usually 5% or more) selling shareholder of a previous company, most states specifically exempt non-compete agreements signed between companies and their employees or minority shareholders.

What about your previous company non-compete?

Berkonomics

Rules about non-compete agreements . So, what are the rules about those pesky non-compete agreements signed upon your discharge, or upon the sale of your previous company? The good news is that if you were not a significant (usually 5% or more) selling shareholder of a previous company, most states specifically exempt non-compete agreements signed between companies and their employees or minority shareholders.

Non-competes, gray areas, and salvaging a failed purchase

Berkonomics

Last week we introduced the subject of non-compete agreements. Certainly, the buyer’s asset purchase documents included a non-compete clause, usually valid for two years from the date of the closing. After the non-compete expires. Email readers, continue here…] How about after the two-year limitation in your non-compete agreement? The non-compete agreement does expire when stated.

Non-competes, gray areas, and salvaging a failed purchase

Berkonomics

Last week we introduced the subject of non-compete agreements. Certainly, the buyer’s asset purchase documents included a non-compete clause, usually valid for two years from the date of the closing. After the non-compete expires. Email readers, continue here…] How about after the two-year limitation in your non-compete agreement? The non-compete agreement does expire when stated.

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?

It's All About Talent (part 2) - Eliminating Non-Competes

Seeing Both Sides

For the last few years, many leaders in the Massachusetts innovation community have been arguing that non-compete agreements should be eliminated. Many studies have shown that non-compete agreements reduce R&D investment and stifle innovation. MIT Professor Matt Marx conducted a seminal study in Michigan that showed that the enforcement of non-competes caused a sharp drop in mobility for inventors, thereby slowing innovation and economic dynamism.

Help Ban Non-Competes In Massachusetts

Altgate

Massachusetts Has An Innovative Approach To Immigration Reform

Feld Thoughts

First, he’s proposing to ban non-competition agreements. Even though I often say that was 11 years and 364 days too many for my “non-big city, non-east coast” personality, Boston still has a sweet spot in my heart. The Massachusetts non-competition situation has always been stupid. In 2009, my partners and I at Foundry Group joined a coalition of VCs to try to eliminate non-competition agreements in MA.

7 Ways Getting In Bed With The Enemy Can Be Win-Win

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. Typically, there are market opportunities that neither of your core competencies can win alone. Where your competitor isn't really competing with your direct market, you can refer business to each other without anyone losing customers.

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How To Manage Better When Moonlighting As A Freelancer

YoungUpstarts

They may have a non-compete clause in your employment contract prohibiting working in “a like business,” so do check first if you’re stepping on a potential legal landmine. If you’re keen on the saving and retirement part of TSR, you may be trying to be a successful freelancer as a moonlight gig.

Key Contracts Every Business Must Use

YoungUpstarts

Whether a business is contemplating entering into a partnership, hiring a service provider or in the process of selling itself, a non-disclosure agreement should be utilized when information is shared with third parties. 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. by Tej Prakash, co-founder of ShouldiSign.com.

How to Write a Sales Commission Agreement 

The Startup Magazine

The Non-Compete Clause. This is why the non-compete clause is essential to building and maintaining a business with salesperson in it. The contract between a company and a salesperson is at the center of creating success or stagnation for both parties. As company owner, you will be writing your sales rep agreement for the most part. Here are some of the most important things that you need to consider. Source: Pixabay.

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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. Although this is more common after someone leaves your employ, you can also ask every employee to sign a Non-compete Agreement when they are hired.

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.”

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.

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.

7 Contracts Every Small Business Should Have On Hand

YoungUpstarts

Especially because non-compliance may damage any legal relations between the parties involved. Non-Disclosure Agreements. Non-Compete Contracts. As such, you need the no-compete business contract to curtail such employees from using any business information. The Census Bureau estimates that there are about 32,570,855 small businesses in the United States. These entities collectively employ around 59.9 million Americans.

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. If your new business is even remotely similar to that of your current or former employer, think hard about any written or implied non-compete agreements you might have. Taking money from unknown or non-professional investors.

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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. If your new business is even remotely similar to that of your current or former employer, think hard about any written or implied non-compete agreements you might have. Taking money from unknown or non-professional investors.

5 Ways To Protect Your Idea From Theft

YoungUpstarts

Non-Disclosure Agreements – A non-disclosure agreement helps to protect your idea by committing all the parties you are working with to confidentiality. Non-compete agreement – If you’re pitching an idea to a potential client or investor, have them sign a non-compete agreement. Have they supported any competing businesses in the past? by Lewis Robinson.

Sharks In The Water: How You Deal With Competition In Business

YoungUpstarts

Learn the difference between non-compete, nondisclosure and confidentiality agreements. Even if you don’t have the budget of your competitors, you can still definitely compete in the marketing arena. When it comes to business, you better believe that monsters are real. Greed-driven, avaricious monsters that want nothing more than to eat your company right up. To steal your ideas and your customers. They’re called your competition.

How Smart Businesses Choose the Best Translation Management Systems

The Startup Magazine

It’s helpful to seek customer referrals from non-competing organizations. The growth of the digital domain is making the world a smaller place. As a result, it’s more important than ever for businesses to create localized content, whether web pages, emails, or articles.

10 Keys To Finding That Perfect-Fit Business Partner

Startup Professionals Musings

Use caution to avoid employer conflicts of interest and non-compete clauses. In my experience, the initial idea for a new product usually comes from a single entrepreneur, but the implementation plan for a new business requires a team, or at least a co-founder. The reason is that any one person rarely has the bandwidth, interest, or skills to manage all the tasks required to build a business. Thus I find that two heads are usually better than one in a startup.

10 Steps To Finding The Right Startup Co-Founder

Startup Professionals Musings

Use caution to avoid employer conflicts of interest and non-compete clauses. A common challenge faced by every entrepreneur is that they don’t have the bandwidth, interest or skills to do everything that is required to build their startup. 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. The right answer is to find a co-founder with complementary skills.

What Start-Ups Need To Know About Employment Law

YoungUpstarts

It covers all employers, whether unionized or not, that meet a certain threshold of interstate commerce activity, and provides even non-union employees rights to certain “concerted, protected activities.” Another area of risk for employers is the misclassification of employees, whether as an independent contractor instead an employee or as an exempt employee rather than a non-exempt one. Image credit: Contract from Shutterstock.

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. NDA entrepreneur startup CDA non-disclosure agreement business

Startups Need Mergers And Acquisitions For Growth

Startup Professionals Musings

Use external sourcing to fill in the non-critical gaps. Don’t use alliances for core competencies. Rather than push non-compete agreements on your superstars, it’s more productive to create incentive systems and creative ways for them to work more independently, just for you. Every entrepreneur tries to maximize his startup growth by building and selling more product and services for the widest geographic area that he can support.

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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. Remember that all businesses, even non-profits, require revenue to survive and prosper. Starting a new business is not an informal process, and should never be treated like a hobby between friends.

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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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.

Accelerate Startup Growth by Looking Outside the Box

Startup Professionals Musings

Use external sourcing to fill in the non-critical gaps. Don’t use alliances for core competencies. Rather than push non-compete agreements on your superstars, it’s more productive to create incentive systems and creative ways for them to work more independently, just for you. Every entrepreneur tries to maximize his startup growth by building and selling more product and services for the widest geographic area that he can support.

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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. Typically, there are market opportunities that neither of your core competencies can win alone. Where your competitor isn't really competing with your direct market, you can refer business to each other without anyone losing customers.

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.

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. Typically, there are market opportunities that neither of your core competencies can win alone. Where your competitor isn''t really competing with your direct market, you can refer business to each other without anyone losing customers.

Think You Can’t Engage Your Customers Under Lockdown? Think Again!

YoungUpstarts

Now is a great time to reach out to other non-competing brands and talk about opportunities to collaborate. The COVID-19 lockdown has dealt a punishing blow to businesses of all shapes and sizes around the world.

Entrepreneur Helps Businesses Focus on Passion Points Instead of Pain Points to Get Results

Hearpreneur

Not only that, I was bound by a non-compete in my local area and his meant that I couldn’t make my magic in my local market where I had an established track record and positive business reputation (unless I negotiated a contract buyout to start my own agency and I didn’t have the funds to do that at the time. Thankfully non-competes are illegal in most states now, and even then, I didn’t let that stop me from following my dreams). Share. “Content is King.”

Conflict of Interest: Examples for a Nonprofit Board

Board Effect

A conflict of interest is signified by someone who has competing interests or loyalties. An individual that has two relationships that might compete with each other for the person’s loyalties is also considered a conflict of interest.

6 Costly Employment Contract Mistakes To Avoid

YoungUpstarts

Non-Disclosure and Non-Compete Clauses That Are Too Broad. Many startups make the mistake of not establishing a proper legal structure right off the bat. However, getting off on the right foot means that you need to dot your i’s and cross your t’s in every aspect of the business — including contracts — to prevent potentially costly problems down the road. One of the key areas in which you need to focus is on employment contracts.

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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. They see the same good ideas so often, that if they signed a non-disclosure on just a few, they would quickly not be able to talk to new entrepreneurs.

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For a Startup, Two Heads are Always Better Than One

Startup Professionals Musings

Watch out for non-compete clauses, and conflicts of interest with the current employer. If you are a first-time entrepreneur, I recommend that you team with a co-founder with experiences, connections, and a skill set that complements, but doesn’t duplicate yours. Even experienced entrepreneurs need a partner to back up each other and improve fundability. The question is how to find that elusive perfect-fit partner.