The lesson on Confidentiality is expanded to include the following Key Question and answer.

A non-compete agreement is a legal procedure required by some employers to ensure confidentiality of proprietary information.  Sometimes called an Employee Confidentiality and Non-Competition Agreement, the document is most often used with professionals or employees with certain skills, such as physicians, accountants, sales people, or computer programmers to keep them from leaking trade secrets and client lists.  In addition, such a document is more often used by employers with multiple outlets, such as "chain” stores.  Any technician may be required to sign such a pledge, because of his/her unique skills and access to internal information.

The terms of a non-compete agreement may vary depending on the employer, but often require that for two (2) years following employment, the former employee may not work for a similar employer, may not work for a similar employer within a 25-mile radius of the former employer, nor work for a competing employer who derives more than 10% of revenue from selling a parallel product.  For example, if you’re a former computer operator for an insurance agency, you may not be able to work for a competing insurance agency for two years, within 25 miles, nor if the new agency earns over 10% from sales of a similar insurance policy.

Enforcement of a non-compete agreement is difficult.  Some courts see such restrictive covenants as detrimental to economic development.  Other courts contend that such agreements can be enforced as long as they are "reasonable.”  To assess the reasonableness of such an agreement, the court may ask: Will the restrictions in the non-compete agreement:

>  harm the public,

>  cause the employee undue hardship, and;

>  protect the employer more than is necessary?

Still other courts contend that such an agreement does not become effective until an employee has worked for the employer continuously for over two (2) years.