It may be inevitable that you entrust your business secrets to employees who work at your Las Vegas company. However, it does not follow that you are at their mercy if they decide to leave. We at the Aldrich Law Firm, Ltd., have advised and assisted many employers who want to use employment contracts to protect their business.
The State Bar of Nevada points out that you may keep your employees from affecting your business in the areas where you are currently operating through a noncompete agreement. However, a court may determine that it is unreasonable for your agreement to forbid an employee to start a similar company in a city or territory that you have not begun to develop.
A judge may decide that some parts of a noncompete agreement are reasonable, but others are not. For example, he or she may see that doing business on the internet expands your business across the country, which is why you have listed the entire United States as your geographical region. While this may be true, the court could determine that restricting former employees from starting their own competing businesses anywhere in the country for two years is too long.
Generally, the broader the region listed in the agreement, the shorter the time limit considered reasonable. A judge has discretion to simply change the terms of the agreement from two years to one year, or even six months, and many have done so when the geographic scope was broad.
Exceptions have been upheld in instances where the geographic region was unspecified, but the client base listed was very specific, when the information the employee possesses is extremely sensitive or when the employee holds a high-ranking position in the company. More information about employment litigation is available on our webpage.
