Non compete agreements are a provision that is made requiring that a party often an employee agrees to keep away from entering similar professional or business to offer competition to another party usually the employer ( Beatty, Samuelson, & Abril, 2018). The non compete agreements which are also referred to as restrictive covenants are founded on the basis that should an employee resign or get terminated at the current workplace they might get employed by other employers or start a business in which they will exploit the trade secrets or confidential information of their former workplaces to gain a competitive advantage. A more extensive scope of the non-compete agreements may bar an employee from seeking employment in other places of work ( Lambiris, Griffin, Viets, & Limited, 2015) .
Parties involved
The technology industry is highly competitive and often requires significant expertise. Digitech is a registered company in New Jersey specializing in developing software for commercial purposes often seeking to find clients interested in getting tailor-made data collection, marketing, and sales tracking software. Precisely, the business being started will specialize in developing software, and as such, the employees who will be contracted will be privy to the information regarding the nature and clients the business will be engaging with. It is worth noting that not all employees are privy to the business confidential information; thus, the parties involved in the agreement are limited. Subsequently, the scope of employees who will be needed to enter into the non compete agreement includes software engineers, the company secretary, and top-level management. Furthermore, the business clients who will seek the services of the company will also be required to enter into the non compete agreements. The choice of the parties to these non compete agreement is advised by the fact that they are expected to engage in decision-making processes and thus will be aware of the confidential information that may be inaccessible to other stakeholders. Further, the business clients are part of the agreement noting that they are in a position to share confidential business information from the transactions entered.
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Duration of agreement
The non compete agreements have different agreement durations ( Mann & Roberts, 2016) . In the case of the employees who engaged in the business, the agreement will be binding for a length of six months in the instance that the employees resign from the business. Additionally, the business clients are bound by the contract for six months in efforts to promote business ethics and abiding with the antitrust laws. The duration of the non compete agreements is advised by the need for the employees to have a right to earn a living since having the agreement span for extended periods may have the impact of reducing the ability of the professional employees to gain meaningful employment. The differences in the contractual terms in the non compete agreements are entrenched in the initial contract, which is offered to the employees upon recruitment. Further, the business considers that valuable information regarding products being developed will have declined in value after the six-month duration.
The geographic range of the agreement
The nature of the non-compete agreements differs significantly between states noting that some of the states do not uphold the non compete agreements while others make provisions where such contracts are upheld only to a certain extent ( Mann & Roberts, 2016) . As such, the non compete agreements drafted by the business will be deemed applicable in the states that uphold the contracts.
Specific activities and subjects included in the non compete agreements
The validity of the non compete agreements provided by the business is entrenched on the scope of the activities as well as subjects in addition to the compensation provided in the agreements. First, the contractual agreements encompass the restriction of employees from disclosing the products that the company is developing in addition to the launch dates for the products. Moreover, the agreement restricts employees from disclosing the company clients who have sought services for tailor-made software. Additionally, the contract will require that the employees do not provide pricing information to the business clients and competitors without prior authorization.
Since compensation is an integral part of the non compete agreements, the business provides an elaborate compensation scheme for the employees ( Mavrikakis, 2018) . Upon expiry or termination of the employment contract the employee bound by a non compete agreement will be entitled to a compensation of 30% of the average monthly salary for six months when the contract will be valid.
Appropriateness of the terms in the industry
As indicated earlier, the technology industry is fast evolving, with intense competition being seen between different industrial players. Consequently, it can be argued that the terms provided within the company's non compete agreement prove appropriate given that the probability of employees to be poached by rival companies will be minimized. Furthermore, the contracts are significantly appropriate, noting that the interests of the software company will be protected with the employees being barred from diverging sensitive business information. Additionally, in the technology industry, non compete agreements are useful since it is possible for the company to protect its goodwill which is considered a useful business asset thus preventing employees from using the goodwill to compete.
Enforceability of the non compete agreements
The enforceability of the non compete agreements depends on the state laws where the agreements have been instituted. Since Digitech has been registered and situated in New Jersey, the enforceability of the restrictive covenants is guaranteed noting that the state allows for non compete agreements. Additionally, the restrictive covenant has an ultimate purpose, which is to protect Digitech's confidential information as well as goodwill from being used by employees in competing companies. Additionally, the contract has a duration of time in which it is valid from the time an employee ceases to be employed by Digitech. Furthermore, the geographical scope of the contract is adequately defined in addition to having a compensation clause provided for the employee for the time they are expected to keep off from getting into a contract with potential Digitech competitors. It is worth mentioning that the time frame of a six months, which is provided in the agreements is within the one provided by the law of up to two years.
Additionally, the agreement's scope is reasonable, thus creating a balance between the interested parties. Moreover, the provisions of Digitech's non compete agreement is not indicative of a potential breach of the antitrust laws. Subsequently, the agreements can be argued to fulfill all the aspects of a valid contract and as such enforceable by a court of law.
References
Beatty, J. F., Samuelson, S. S., & Abril, P. S. (2018). Essentials of Business Law . Boston, MA: Cengage Learning.
Lambiris, M., Griffin, L., Viets, L. G., & Limited, C. A. (2015). First Principles of Business Law 2015 .
Mann, R. A., & Roberts, B. S. (2016). Business Law and the Regulation of Business . Boston, MA: Cengage Learning.
Mavrikakis, A., (2018). Business Law and Practice 2018/2019 . College of Law Publishing.
