Avoiding Compliance Pitfalls When Drafting Noncompete Agreements

Author: Brightmine Editorial Team

Introduction

Organizations use noncompete agreements to protect legitimate business interests, such as trade secrets, confidential information and customer goodwill. But use of these agreements has increasingly come under scrutiny as states restrict or ban their use, creating pitfalls that HR must avoid when drafting noncompetes to ensure compliance. And, while the Federal Trade Commission (FTC) withdrew its final rule banning noncompetes, it continues to focus on individual cases of noncompete abuse.

This guide outlines common pitfalls and provides a structured approach to drafting a compliant noncompete agreement.