Are noncompete agreements relevant to your Kentucky business?

It's hard to overstate the demands that routinely challenge a Kentucky employer focused on running a profitable business in virtually any industry.

Issues and regulations relevant to employment law come quickly to mind in any assessment of owners' concerns. We note on our website at the Lexington law firm of Rajkovich, Williams, Kilpatrick & True that, "The laws governing employment grow more complicated and confusing every day."

We help diverse businesses across Kentucky deal effectively and efficiently with worker-related matters, ranging from hiring and performance to complaints and termination.

Employers may have written employment contracts with select employees. Those individuals are often key workers who will be working closely with a company's trade secrets and other proprietary data. As a result, these contracts often contain "noncompete" agreements.

The purposes of these agreements is to protect the employer by limiting the employee's ability to immediately take new employment with a competitor and to protect the employer's proprietary information, such as trade secrets and customer lists.

Typically, a noncompete will prevent the employee from taking competitive employment in a certain geographic area for a specific period of time. For example, an agreement might provide that the employee cannot work for any competing business in Kentucky for one year after leaving the employer. Courts will normally uphold these restrictions if they are reasonable as to both time and geographic scope under the particular circumstances.

Many noncompete agreements also restrict or prevent the use of the employer's trade secrets and proprietary information provided to the employee. This safeguards the employer both during and after the worker's employment.

A well-executed noncompete agreement is a powerful tool for safeguarding business interests at the outset of a worker's employment or even thereafter, but it merits close scrutiny and input from a seasoned business law attorney. Courts closely scrutinize noncompete agreements, balancing an employer's legitimate interests against those of an affected worker. Among other things, a judge will assess a noncompete in terms of its stated scope, geographically imposed limits and duration. While courts do enforce noncompetes, their decision to do so is far from casual. An agreement must be deemed reasonable.

A proven employment law attorney can help ensure that the agreement will withstand this scrutiny.

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