In the United States, the number of employees who sign non-compete agreements varies between 16% and 18%, so it’s a common practice. Such contracts are often included in the employment package of corporate documents. Generally, NCAs ban the workers from being hired by the company’s direct competitors and mostly apply to top managers and technical specialists.
Enforcing this type of non-compete agreement template makes sense if an employee has access to the company’s confidential information and trade secrets. In case of employment termination, they could use them at the new workplace for unfair competition. Most companies wishing to avoid the losses arising from unfair use of their confidential data obtain a written promise that such information will not be used against them.
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In Connecticut, no state-specific laws and regulations govern NCAs, with such types of contracts governed by case law. However, any employer should keep in mind a range of peculiar restrictions limiting the scope of such arrangements, namely:
Any contract intended to restrain a person from rendering homemaker, companion, or home health services without explicitly limiting the state’s geographic area and defining a validity period is considered null and void.
Generally, an employer cannot enter into an NCA with a Connecticut physician, as governed by Connecticut General Statutes (Section 20-14p). The only exception to this rule is the proven necessity to protect a legitimate business interest. In such a case, the contract should be reasonably limited in time (up to 12 months) and geographic scope (within fifteen miles from the primary place of employment).
NCAs cannot apply to broadcasters banning their employment both in terms of time and geography, as provided for by Connecticut Statutes (Section 31-50b).
And finally, security guards are another professional group not subject to NCAs. Under the Statutes (Section 31-50a), they have a right to work the same or similar job, at the same location or for another employer, or even as self-employed persons. In this case, an employer may succeed in entering a valid NCA only if the security guard has access to trade secrets.
Creating a Valid Non-Compete Agreement
Mostly, four preconditions must be met for a non-compete agreement to be legally valid:
The employee’s intention to conclude an NCA voluntarily, since no one can force a person into it.
NCA’s reasonable duration period. Often, one or two years are considered reasonable.
NCA’s reasonable geographic scope. For small businesses, the appropriate area should be about 15 miles from the initial workplace, while multinational corporations tend to limit their ex-employees worldwide or nationwide.
A non-compete agreement should not restrict the employee’s ability to work entirely. It should not limit a person’s ability to be employed in their professional field.
Required NCA Terms and Conditions
The six elements below must be included in a non-compete agreement to make it valid in Connecticut:
The introduction of the agreement should include the requested information, such as the full names of disclosing and receiving parties.
Details of the employee’s promise, namely, what the employee promises to do or not do to keep their employer safe from unfair competition implications. These may include the obligation not to
provide similar products or services
engage in similar business practice, including that with the company’s customers;
engage in business operations with the company’s general or specific competitors
engage, cooperate, or partner with the current or former company employees
Duration of the agreement, and whether it starts on the same date as the employment beginning or termination.
Whether the employer is willing to provide the “Purchase Option.” If an employer offers this option, they can buy the right to obtain the company’s information, even though it can result in an unfair competition practice with the subject company.
Governing jurisdiction, which, in the case of Connecticut, is either the state itself or its specific localities.
The effective date, signatures, printed names, and titles of the parties to an NCA.
Other Connecticut Forms
Try out our document builder to customize any template available on our site to your needs. Here is a list of some other common Connecticut documents we offer.
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