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What is a Covenant Not to Compete?

Generally, an employee signs a covenant not to compete contract along with their new hire paperwork when starting a job. This formal agreement protects the employer when the employee quits his or her job. The contract will usually stipulate that the employee is not to perform a similar job for a certain period of time after termination.

A covenant not to compete, also known as a non compete agreement, with an employer is usually enforceable. The reason for these contracts is that a business doesn't want their trade secrets, highly sensitive information, and customer lists shared with their competition. Also, if an employer trained and developed an employee, they don't want another company to reap the benefits of that trained and skilled worker.

Each state has different laws regarding covenants not to compete. These contracts need to be reasonable and not give the employer too much power or else the state courts may rule them unenforceable. To determine if you have a case, contact an Iowa business litigation attorney at Brady Preston Gronlund. Call (319) 866-9277 for a free consultation with one of our experienced Cedar Rapids business litigation lawyers today.

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