Noncompete agreements are contracts where an employee agrees not to compete with their employer for a specific period after leaving the company. They include clauses such as geographic limits and time restrictions that protect a company’s confidential information and client relationships. If you’re a business owner, it is important to understand the reasonable limits you can place on employees moving to new roles to ensure your protections actually hold up in court.
Understanding a reasonable scope
For a noncompete to hold up in an Illinois court, the restrictions must be “reasonable” and narrowly tailored to protect a real business interest. Judges look for a fair balance that protects your company without stopping a person from earning a living entirely. Common reasonable limitations often include:
- A specific timeframe: This refers to the duration of the work ban. Restrictions on performing similar work for a competitor typically last between six months and two years from the date the employment ends, as Illinois courts often view a longer “blackout period” on starting a new job as excessive.
- Defined geographic reach: This limits where the person can work. The area should be limited to the specific cities or counties where your business actually operates or where the worker had a direct impact.
- Specific job activities: This defines the type of work they cannot do. The contract should only bar the person from performing tasks that directly compete with your specific services, rather than a total ban on their entire profession.
In Illinois, these clauses are enforceable under law. It’s allowable as long as the restrictions do not go beyond what is necessary to protect the business or place an unfair burden on the worker.
Avoid including unfair clauses
Your team should feel valued and respected throughout their entire time with your company, even for the ones who eventually choose to move on to new opportunities. That can mean using clear language on noncompete agreements that focuses on protecting your specific trade secrets rather than using broad, scary terms that hinder a person’s career. Taking the time to draft these documents correctly allows you to protect your business while maintaining the professional and human relationships that help your brand grow.