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Is There Any Place in Business for a Non-Compete Agreement?

So-called non-compete agreements have become something of a pariah in the business world in recent years, suffering from a barrage of complaints that tag them as repressive instruments that unfairly burden workers. One recent article penned by a U.S. Department of Labor attorney calls them "overbroad, blunt instruments" that are far too often used in lieu of other means of balancing the employer-employee relationship.

And that is what it's all about when it comes to any judicial evaluation of a non-compete agreement: an equitable balancing of interests.

On the one hand, an employer has the reasonable right to protect a company from a rogue employee who, unless legally constrained, would willingly fork over trade secrets to a new boss and business rival.

On the other hand, though, most American workers don't routinely deal in trade secrets and with other proprietary company data that can be materially sabotaged through its revealing to a competitor. Curtailing their future opportunities through an exacting non-compete can seriously undermine their financial futures and next-step job opportunities.

Where should the line be drawn? How commonly should non-competes feature in the business realm in Connecticut and elsewhere across the country?

Although that will ultimately be a matter for a court to decide in the event that a non-compete becomes the central subject matter in litigation, the above-cited attorney writer states a widespread government view that such contracts should generally be limited. She states that there are other ways to protect company data, with a non-compete too often being a heavy-handed tool that unfairly limits workers seeking new jobs and careers.

Both workers and employers can consult with a proven commercial attorney regarding non-competes. When they are reasonably drafted and carefully limited, they can be effective management tools. Conversely, there are often other means through which to promote company interests and protect workers' rights, as well.

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