A non-compete agreement may seem like a solution for your business that will help ensure your employees do not share sensitive information. But, these documents can also create some issues if you are not careful.
IPL.org explains a non-compete agreement should only be in place when you absolutely need it so that you do not bring legal issues upon your business needlessly.
Litigation
The biggest risk with a non-compete agreement is that you will have to go to court to defend it. You may end up having to file a case against a former employee for breach of the agreement, or an employee may take you to court, questioning the validity of the agreement. The time spent battling the case can be long, and the process is costly. Make sure if you use a non-compete agreement that it is airtight. The language should be clear and legally sound.
Employment issues
Whether you make an employee sign a non-compete agreement upfront or they are something you have introduced later in employment, there is always a chance the employee will walk away instead of signing. This is yet another reason why you have to be sure your agreement is solid. It also is a good reason to ensure fairness, which is something the court will consider when assessing it if you end up in court.
The bottom line is that non-compete agreements can be beneficial, but you need to use them do so carefully. Make sure you craft them carefully so that they have clear terms and are fair for everyone involved. Ensure your employees understand why you need one as well.