Employee’s Non-Compete Agreement Unenforceable After Transfer to Third Party

People make a business go. Thus, a company’s workforce is a valuable asset. One way for a company to maintain its workforce and protect the investment it makes in its employees is through the use of noncompete agreements. This is especially true where employees are either highly trained, such as in the medical or other scientific and professional fields, or have access to valuable company information, such as sales personnel.

Non-Compete Agreements as Assets

Non-compete agreements for these and other employees provide valuable protection not only to the employer, but can also be an attractive protection for a company’s potential purchasers. In the eyes of a purchaser, employees and the terms of their employment represent assets. Certainly, following the purchase or acquisition of a business, a major source of concern for new ownership is a smooth transition and continuation of the business. The use of non-compete agreements provides extra incentive for employees to stay, and keeps them from competing with new ownership if they go.

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