Employee Poaching: 5 Essentials for Non-Compete Agreements

Here are 5 ways to protect your company and prevent employees from entering into competition with your business.

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4. Incentive compensation agreements.

For companies that offer their employees bonuses, stock options or the like, your incentive compensation agreement ensures “loyalty through golden handcuffs.”

For instance, you can tie bonus entitlement to remaining with the company for a certain period of time (sometimes referred to as vesting). You can also allow an employee to keep a bonus, provided he doesn’t defect to a competitor within a certain time frame (if he does, he has to repay it).

5. Employment manuals.

Employee manuals (also known as handbooks or codes of conduct) provide a handy place–other than a separate written agreement–to bring all of your non-compete expectations to the attention of employees. That way, you don’t have so many individual agreements floating about.

Many employers use the manuals to explain, “This is how we do things here, and this is what will get you booted out the door.” Because trade secrets can be shared so easily by electronic means, it also provides the company with a vehicle to express its communications policies. That includes the scope of permissible blogging by employees, especially if the blogging has anything to do with the company. Make sure your employees sign a form stating that they received and have read the manual.

These agreements and provisions require delicate wording.

In other words, “Don’t try this at home.” Find an experienced employment attorney to work with your small business. The wrong wording could make all the difference between protection and exposure.

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Photo: Blanco

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