As a shareholder in a business, you may be asked to sign a non-compete agreement. This agreement typically restricts you from working for or starting a competing business for a specified period of time after leaving your current company.
While non-compete agreements can be a contentious issue, they are often used to protect a company`s trade secrets and prevent key employees from taking their knowledge and experience to a competitor.
It is important to carefully review the terms of a shareholder non-compete agreement before signing it. Make sure the restrictions are reasonable and do not overly restrict your ability to find work in your field after leaving your current company.
Another key factor to consider is the scope of the agreement. Does it apply to all competitors, or only to those in a specific region or industry? This can greatly impact your ability to find work in the future.
One important caveat to keep in mind is that non-compete agreements are not always enforceable. Courts will typically weigh the interests of the company against the potential harm to the employee when determining the validity of these agreements.
In some cases, a court may find that the terms of the agreement are too broad or unreasonable and may strike down the agreement altogether.
If you are considering signing a shareholder non-compete agreement, it is important to weigh the potential benefits and drawbacks carefully. While the agreement may offer some protection to your current company, it could also limit your options for future employment.
Ultimately, the decision to sign a non-compete agreement is a personal one that should be based on your individual circumstances and priorities. With careful consideration and the guidance of a knowledgeable attorney, you can make an informed decision that best serves your interests.