Reasonable Restrictions in Employment Agreements

Employment agreements bind the company to a contractual situation with the worker so that certain guidelines and rules are in place, and the company also may impose restrictions on employment that could lead to penalties for certain behavior. The business must follow the state laws, labor laws and the federal wage and labor standards.

Protecting the intellectual property, secrets and confidential information within the company is essential to good business practices. It is possible to impose restrictions that are reasonable and appropriate for the type of data that employees will handle within the business. By creating and enforcing restrictive contracts, the employer may provide a foundation of valid but legitimate and safe activity within and outside of the building. This is possible through certain practices and contractual obligations in agreements with employees such as the nondisclosure agreement, non-compete contract and confidentiality forms. It is also imperative that the owner has a lawyer ensure such documents are enforceable in a court of law.

Restrictive Covenants Explained

One of the primary ways to enforce reasonable restrictions is through the restrictive covenant. These include confidential lists of clients that only certain employees have access to and contractual agreements that many or all workers will sign either during training or at some point while working in the company. The restrictive covenant is in line with both state and federal laws and will require the employer to follow certain guidelines. These agreements and covenants restrict the flow of information and ensure that legitimate business details and interests remain within the company in usual circumstances. However, a court may modify the agreement if there is a reason to based on the situation.

Reasonable Restrictions Defined

A former employee may breach his or her constrictive covenant with the company he or she worked at by engaging in employment through a direct competitor. This is possible by working for the company after the contract remains in effect and is still valid. Additionally, the former employee could provide the competitor with details and information about the processes and how the other business works. This is generally another breach of agreement in nondisclosures. If the person is under a non-compete contract, working with someone or an entity that competes with his or her former company could violate the terms of that agreement.