In the United States, business entities have to draw up many legal documents to protect the company and maintain effective business relationships. One of such forms is a non-compete agreement. In this review, we will dwell on the NCA’s purposes, structure, and enforceability in the state of Wyoming.
Non-compete agreements are also known as covenants not to compete. They can come in handy in different situations and contexts. Non-competes are of primary use when a business entity deals with employment, mergers, and acquisitions.
Using this form for an employment contract means that a worker signs the paper to ensure any confidential information they have access to is safe. Confidential information usually includes unique business ideas, methods, marketing techniques, financial information, business plans, and so on.
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Before signing an NCA, the new employee must make sure that they entirely understand the meaning of the term “confidential information.” The company’s management must also warn their employees about penalties imposed for trade secrets, customer data, or other sensitive information disclosure. No company member should ever disclose that information to the public or use it for a third party’s benefit.
Non-competes agreements are also signed during mergers and acquisitions. Such documents ensure that the former company will not compete with you the next day after buying a business entity. In terms of business sales, non-competes are usually easier to enforce. Sometimes, when creating a business partnership, parties sign an NCA not to compete after effectively terminating their collaboration.
Penalties for an agreement violation may vary from state to state and sometimes depend on the worker’s field. Some employees who breach the agreement and leak confidential information may be subject to fines or reimbursements; for others, divulging important data may lead to imprisonment.
In Wyoming, like in many other states, there is no official non-compete template. Thus, the responsible person for drawing up such a form needs to learn essential details to include in it. We encourage you to use our form-building software to create a corresponding template. Please look through the sections below required to develop a covenant lawful and straightforward for the worker.
At the top of the document, the parties (often referred to as the “Company” and “Recipient”) introduce themselves. Here, they must write their full legal names.
In this section, the employer provides specific instructions for their worker, lists obligations and rules, and determines the contract validity period. They should also include a section with possible penalties for breaching the NCA’s terms.
The employer must define the information considered confidential and, therefore, not to be disclosed or used against the company’s interests. It is also crucial to mention what info the worker is allowed to reveal.
A non-compete agreement cannot be considered valid without both parties’ signatures and an effective (issuing) date. Below the signatures, the parties have to put their printed names. Such agreements do not require notarization.
After the covenant is signed and dated, it is advisable to make copies and distribute them between the parties involved. The worker may need to review their obligations once they apply for a new job to avoid misunderstandings between them and the new employer.
The Wyoming Code does not regulate non-compete agreements. Moreover, the local authorities majorly disfavor such covenants. However, they are still enforceable in the state and should meet general requirements applicable to covenants in most states. The most basic requirements are the sensibility of limitations and consistency with the public interest.
The Wyoming NCA has to comply with the following restrictions:
Such covenants are meant to protect the employer’s interests rather than stop the worker from starting a business or proceeding with any other business activity and limit their rights to work and make a living.
If the employer’s business is operating only in Wyoming, geographical restrictions must be limited to this state.
This type of restriction depends on the context in which a non-compete agreement is used. As the NCA is usually part of an employment contract, the validity period is limited to one or two years.