Say you own a medical device company in Denver that sells throughout North America. Your Midwest sales rep leaves. You wouldn't want a noncompete to restrict the ex-employee from working in any capacity at any company in the medical industry. That would most likely be deemed too broad and too restrictive by the courts. Instead, you'd probably want to keep the ex-employee from selling medical devices in his old sales region or maybe restrict him from selling in the U.S., leaving the world and Canada alone.
Noncompete agreements are more important than ever.
In today's business world, knowledge of marketing, clients or product information is a competitive weapon that must be preserved. Noncompete agreements should be drawn up by your company's lawyer and signed when a new employee comes on board, adds Pepper Hamilton's Harvey. It can also get your company reimbursed for business that it lost because the ex-employee failed to follow the noncompete agreement. Of course, if you run into problems with a noncompete, there are other forms of redress, says Stephen Harvey. For example, a former employee could be kept from divulging an upcoming marketing campaign to his new employer.