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The pros and cons of non-compete agreements

Residents of Houston and other nearby areas of Texas may want to learn more about non-compete agreements. These agreements have both good and bad points. Their power lies mainly with the employer, who is the one to issue this legal clause. This agreement legal binds the employee in their search for their next job.

What is a non-compete agreement?

It is a legal clause that says that an employee may not work for another company that is a competitor. It relates to after their employment with the present company is over.

The purpose is to prevent the employee from revealing information that is proprietary. Contractors, employees and consultants may need to sign this agreement. However, some states, such as California, refuse to enforce these agreements.

The pros of a non-compete clause

These agreements may protect trade secrets, designs and other proprietary information. They may also inspire more innovative work in those who sign them. If the employer is seeking to find employees to stay for longer terms, the non-compete may heighten employee loyalty.

The cons of a non-compete clause

These agreements weaken bargaining power from the position of the employee. Because they have to wait a period of time before applying to a similar position in their field, the non-compete may discourage some good potential employees from coming on board.

There are no social benefits for the working employee who signs this agreement. Noncompetition agreement contracts and disputes may cause some friction between an employee who may face a difficult time finding work after they leave a company.

Non-compete agreements mostly benefit employers. However, there may be some negotiation on the terms when the employee signs this clause at the beginning of their employment.