Question: I am a small business owner and would like to know if you feel it is necessary to have already existing employees sign a non-compete agreement. Some people might feel as though signing this agreement is to protect your business and what you have worked so hard to create and others might feel as though it is disrespectful to tell your employees that they cannot branch out and use the skills and knowledge that they have gained from working for you. What is your take on this?
Color Me Beautiful Wedding Planning & Event Design
Shanesia Says: Hello Alesia. First of all, let me just state that I am not a specialist on this field. What I am about to give you is purely my personal opinion based on what I did with my own company.
Before going further, I would like to say that I totally adore the industry that you have chosen. Wedding planning is not only full of pretty, romantic, and fancy things. It is also a creative and imaginative world that is full of surprising ideas and concepts. This very perception brings me back to your question. A Non-Compete Clause (NCC) is one thing that every employer who wants to protect his trade secrets and other company information has thought about at some point. This is especially true in your kind of industry, where contacts as well as original concepts and distinctive business practices are most valuable and are what sets you apart from the next wedding planning company.
Due to one reason or another, every business owner loses an employee. Just like you, I am guilty of worrying about what happens if one of my employees decides to leave and work with a competitor, or even worse start his own company with my trade secrets on one hand and my entire contact list on the other.
What I did. I was once confronted with the dilemma of whether or not to include a Non-Compete Clause on my employee contracts. After days of carefully thinking about it, I decided not to. I realized that I did not want to deprive my employees of the chance to start their own business (my life mission is to help people start their business and I would never want to go against what I was preaching) or work with another company just because they are under the same industry as mine. I mean, we are talking about a person’s livelihood here. I thought, what if I had to fire a member of my staff… someone who only had experience and skills related to the business coaching industry? Would I want to render him jobless for a few months until the agreement expires? Of course not. I also considered freedom of choice. If an employee thought that he would be happier with the next company, I did not want to stop him.
The concern remained, however: I wanted to protect confidential company information. The solution I went with was to include a Confidentiality Clause in my contracts. It states that all employees agree not to disclose any information about my business, including but not limited to information on procedures, processes, information on leads or possible clients, and information on existing clients. Up to now, this agreement has served its purpose in protecting crucial information about my coaching company, Savvy Business Makers.
Now if you decide that you really need an NCC, I suggest that you stick with reasonable terms. Consider the length and the scope of the agreement. Making it last too long (more than a year) or cover a very wide geographical area than can be a little unfair.
Get professional help. Once again, I would like to stress out that this is merely my opinion. Nothing can beat advice from an expert on this field. I strongly suggest that you consult with a lawyer. I recommend the services of Kendrick Law Practice, LLC. This firm is lead by one of Savvy Business Makers’ previous Limelight Entrepreneurs, Small Business Attorney Dar’shun Kendrick. She is a brilliant attorney who also serves as one of Georgia’s State Representatives. She will be able to provide you with everything you need to know about Non-Compete Clauses as well as help you with all the technicalities. You can check out more information about Kendrick Law Practice, LLC by visiting their website www.kendricklaw.net.
I look forward to hearing your feedback and wish you the best in your wedding planning and event design company.