Fall Magazine - Page 48

tion they might hear or see while rendering services . In other cases , it may be appropriate to have the contractor sign a Non-Solicitation Agreement restricting their ability to provide their services directly to a company ’ s customers without the company as the middle man . However , if a contractor can provide to a company ’ s customers the same primary service the company provides , then the contractor is likely misclassified . Put another way , a worker who must sign a Noncompete Agreement is more of an employee than an independent contractor .
When a Noncompete Agreement is warranted and appropriate , a lawyer familiar with state law can help ensure the legal enforceability of the Agreement . In Georgia , for example , an employee can be required to sign a Noncompete in exchange for the employment opportunity alone . However , in Pennsylvania , at-will employment is not consideration for a Noncompete ; some other bonus or financial incentive must be provided . Texas allows training or access to specific trade secrets in exchange for the Noncompete Agreement . In Oregon , an employee must meet a minimum salary threshold before being required to sign a Noncompete .
A lawyer can also assist in determining if the Noncompete is “ reasonable ” ( the Courts ’ favorite word ) in terms of term and geographic limitations . Most states allow term limits of one or two years . The geographical limitation must be specific and narrow enough to allow the worker to continue working . For national or global employers , it is often more prudent to name the company ’ s competitors rather than attempting to determine reasonable geographic limitations . Failure to check all these boxes , pursuant to widely varying state laws , will make a Noncompete Agreement completely worthless .
So , what are the keys to drafting enforceable noncompete and non-solicitation agreement ?
1 . Correctly determine which document ( s ) are appropriate for the worker . a . Could the worker use a company ’ s sensitive information to provide services that unfairly compete with the company ? b . Could the company be adequately protected by a Confidentiality Agreement and / or Non-solicitation Agreement , without limiting the worker ’ s employment opportunities .
2 . Confirm the state requirements for the appropriate document . a . Is the worker provided adequate consideration ? b . Is it clear what information the worker might access ? c . Are there time limits on the restrictions ? d . Is there a reasonable geographic limitation which still allows the worker to be employed without relocating ?
Considering the above will safeguard business from being left with only an unenforceable agreement and Big Regret .
Crystal Stevens McElrath is a partner in the law firm Swift , Currie , McGhee & Hiers , LLP . She practices workers ’ compensation defense as well as employment law defense and counseling , specializing in disability and leave laws . She regularly advises , trains and defends clients related to wage and hour , discrimination and human resource laws . For more information , go to swiftcurrie . com .
48 customized logistics & delivery Magazine fall 2022