Wrapping Up Key Employees

A frequently important component of successful business succession planning is "tying" key employees to the company. This often takes the form of either a non-compete, or incentive based agreement to keep a person.

How do you keep a key employee without running afoul of the law when it comes to non-competes. Some professions prohibit, on public policy grounds the enforcement/validity of non-compete agreements. In other situations, you must look to the state law of the jurisdiction that you are operating in, to determine what is the likely limit to the time and geographic scope of the limitations in the agreement.

This is important, because you would rather have something that you can have confidence will protect you as the business owner, and not encourage a lawyer the departing employee hires to review the agreement [they typically never hire anyone to review it before they sign it] to challenge the agreement in court. So make it reasonable under the law of the state, is the key.