One thing that you may want to consider using in contract with your employees is a noncompete agreement. Essentially, you are just telling the employee that you need to reduce risk for your own company and that they are prohibited from working for the competition. Some company owners worry that employees will essentially see them as a way to get on-the-job training, but then they will leave to start their own companies or to join the competition, two situations those original owners would like to avoid.
However, a noncompete agreement is not going to stand in all cases. What do you want to avoid so that you don’t risk invalidating it?
A lack of scope
The biggest problem with a noncompete agreement is simply when it doesn’t have any restrictions. An agreement that says a person can never work in that industry again, for any company, is never going to stand. It would be far too restrictive to the employee. It would seriously harm their career and ability to earn a living.
As such, you need to put in some sort of scope so that the agreement is a bit more restricted in nature. For instance, it may only state that the individual can’t work for the competition for 12 months after leaving your company. Or it may state that they can’t switch to the competition within 50 miles of your business, rather than trying to encompass all of Pennsylvania or all of the United States.
It’s important to know that your contracts are actually binding, so be sure you know about every step you need to take when you set it up.