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Employers may require their employees to sign employment agreements restricting them from working for other companies in the same line of business during, and for a limited time after, their employment. Employers generally may require these agreements as a condition of hiring or continued employment. However, employers may have to give something of value to current employees in order for the agreements to be valid.
These agreements not to compete are generally enforceable unless they are unreasonable.
Agreements may be unreasonable if they violate the law, last for too long after the employment relationship ends, apply too broadly to jobs in a large geographic area, prevent the employee from finding another decent job, are designed just to hurt the employer’s competitors, or are not necessary to protect the employer’s business. If the employee is fired, or if the employee quits after being asked to do something illegal, the agreement may not be enforceable.
information for their own purposes. Confidential information includes terms such as manufacturing processes, customer lists, and financial information that should be kept private. These employment agreements can apply only to secrets learned while working for the employer, and cannot prevent employees from using or sharing information they find independently.
Furthermore, employers cannot use these agreements to prevent employees from reporting illegal activities.