What do non-compete and non-solicitation mean when talking about an employment agreement? As a small business owner, you need to know how to properly use these clauses. But what do you need to know, and how are these clauses used within agreements?
In this episode, I talk about considerations before you even start drafting your non-compete clause, questions to ask yourself while drafting, and precautions you need to take (especially with non-competes). I also give examples of each type of clause and some action steps.
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In this episode:
[02:00] – A non-compete clause typically appears within an employment agreement, although it can be separated as its own agreement.
[02:42] – You need to exercise caution when using these clauses, especially non-competes.
[04:16] – Make sure your non-compete clause isn’t too restrictive; otherwise it may be unenforceable.
[04:36] – Consider what you’re trying to protect in your business before you start drafting clauses.
[05:25] – How long will the clause be in effect? The time request needs to be reasonable.
[05:46] – What actions are you prohibiting? Often, non-competes are based on three things.
[06:40] – Including a geographic region might not make sense for you if you’re an online business.
[07:36] – Danielle reviews an example of a basic non-compete clause.
[09:06] – With non-solicitation clauses, you need to consider similar things as non-compete clauses.
[09:45] – Danielle reads an example of a fairly typical non-solicitation clause.
[10:39] – Wrapping up the episode, Danielle gives a quick review of the clauses and reveals the action steps to take.