Non-Competition & Anti-Piracy Agreements
Non-Competition and Anti-Piracy Agreements
What Is a Non-Competition Agreements?
non-competition agreement, or what is sometimes referred to as a “non-compete,” is an agreement between a company and one of its former employees or owners that for a period of time following that employee’s or owner’s departure from the company, that person will not engage in activities that would have the effect of competing with their former company. A non-competition agreement will state, for example, that the former employee or owner is prohibited from contacting and/or soliciting business from any of their former company’s customers, will not offer a particular product and/or service for sale within a specified geographic area, and will not use any proprietary or other confidential information belonging to the former company.
Are All Non-Competition Agreements Created Equal?
A non-competition agreement must contain three elements to be enforceable: (1) a definitive amount of time over which the agreement will remain in effect; (2) a description of the geographic area in which the former employee or owner will be restricted from competing; and (3) a clear description of the product and/or service that the former employee or owner will be prohibited from offering over the term of the agreement. If one of those terms is missing, the agreement generally cannot be enforced. If all of those elements are present, the courts then look at whether those terms are “reasonable.” What is “reasonable” depends on factors such as the complexity of the business involved, the amount of time and training that will be required to bring a new person up to speed, and whether the agreement goes beyond what is necessary to protect the former company’s legitimate interests. A non-competition agreement that remains in effect for 2 years might be reasonable in one case, but unreasonable in another. Likewise, a non-competition agreement that covers the entire country might be reasonable in one case, but unreasonable in another.
Why Would I Want to Mediate Instead of Litigate?
Because time means money, and whether you are a business owner or employee, your job is to keep your eye on the ball. Most everyone understands that attorneys’ fees and litigation costs that parties can run rather high. What is most often not appreciated, however, are the opportunity costs of being a party in a lawsuit. Litigation forces business owners and employees to spend significant amounts of time compiling documents, meeting with attorneys, preparing for hearings, answering discovery and testifying at depositions and hearings. The process is time-consuming and highly stressful. While these factors may be difficult to quantify, therefore, they will invariably affect your and your employees’ productivity and everyone’s ability to be effective at work.
What Types of Business Issues Can Be Mediated?
Any type. Anything from a simple breach of contract case to a multi-million dollar antitrust or infringement case can be mediated. Examples of business disputes that are good candidates for mediation are disputes involving the sale and leasing of property, the management of a corporation, limited liability company or partnerships, misappropriation, fraud, digital commerce, construction law, shareholder disputes, infringement claims, unfair competition, licenses, and non-competition agreements.
How Do I Get a Mediation Started?
All that is needed to start a mediation is an agreement by all of the parties to submit the dispute to mediation. This can be done either before a lawsuit is filed or after. If a lawsuit has already been filed, the court may order the parties to participate in mediation, but in those situations the court will typically appoint a practicing lawyer to act as the mediator who may or may not have the expertise necessary to effectively mediate a dispute. It is important to have a trained, experienced mediator handle your case, and to have input into the selection of who that person will be.
What Is an Anti-Piracy Agreement?
An anti-piracy agreement, or what is sometimes referred to as a Confidentiality Agreement, is an agreement that protects the company’s proprietary and confidential information from being used or disclosed by the former employee or owner. These agreements are typically worded broadly to cover all information gained by an employee or owner in the course of working for the company, including customer client lists, pricing information, business strategies, digital data, databases, software programs and other information that attains value in not being made known or available to competitors. Sometimes these agreements are entered into separately from a non-competition agreement, but are often included in the same document. Unlike non-competition agreements, an anti-piracy agreement or clause can remain in effect in perpetuity.
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